Hagerty, an automotive enthusiast brand offering a specialty automotive insurance platform built upon a membership organization for car lovers, and AldelFinancial Inc. (NYSE: ADF) (“Aldel”), a special purpose acquisition company, today announced that they have entered into a definitive business combination agreement.
Upon the closing of the transaction, Aldel will be renamed Hagerty, Inc., and become publicly traded, with its common stock expected to be listed on the New York Stock Exchange under the ticker HGTY.
Hagerty is a leading specialty insurance provider for classic and enthusiast vehicles — with more than two million vehicles insured globally, an industry-leading 84Net Promoter Score (NPS) and partnerships with nine of the top 10 U.S. automotive insurers. At Hagerty, everything begins and ends with the love of the automobile –a passion shared with its more than 1.8 million members that fuels the company’s distinguished membership model and positions Hagerty to optimize growth in the estimated 43+ million vehicle automotive enthusiast market.
According to Hagerty’s proprietary data, there are more than 500 million individuals around the globe who express an interest in cars and approximately 69 million in the United States alone who declare themselves automotive enthusiasts. Hagerty has invested in an omni-channel insurance distribution model that positions the company to unlock the entire addressable market and enables the organization to scale through national insurance partners, local agents and brokers, and direct distribution.
Hagerty’s highly differentiated membership model helps to drive loyalty and retention by engaging, entertaining, and connecting with members at every stop of their journey –digitally, on the track, in the garage, at an event or on the road.The company’s portfolio includes the innovative Hagerty Drivers Club, more than 2,500 automotive events annually(including the recently acquired Amelia Island Concours d’Elegance), an expanding automotive media content platform, and Hagerty’s proprietary valuation tools. Hagerty’s unique business model has resulted in a strong track record of success, including:
• Greater than 25% compounded annual revenue growth rate over the last three years
• Strong customer retention at 90%
• Average loss ratios significantly lower than the U.S. personal lines auto insurance industry
• Millions of individuals following Hagerty’s automotive insights and social media programs
Looking forward, the company expects to achieve continued double-digit revenue and earnings growth underpinned by its long-term contracts, solid building blocks and strategic partnerships.
McKeel Hagerty, CEO of Hagerty, said: “When it comes to fueling the insatiable passion of tens of millions of automotive enthusiasts, Hagerty is well positioned as a leading specialty insurance provider with a unique subscription and membership model and portfolio of immersive automotive events, entertainment and valuation tools. For our members, this means a comprehensive and compelling experience that goes far beyond an insurance transaction. For our business, this means market-leading brand loyalty, an attractive business model with multiple points of monetization, a track record of financial success and a strong foundation for future growth.”
Hagerty continued, “Today’s announcement is an exciting step forward for Hagerty. We are thrilled to partner with Rob and the Aldel team, who bring extensive expertise and strategic relationships in the automotive, insurance and financial sectors that will be a key strategic advantage for Hagerty. We believe this transaction will help to accelerate Hagerty’s many growth opportunities and realize our bold mission to build the best automotive enthusiast brand in the world and save driving and car culture for future generations. As we look ahead, we are focused on investing in Hagerty’s digital user experience interfaces to support our growing membership base, while we continue to expand our portfolio with highly engaging car events and exciting services like DriveShare by Hagerty and Hagerty Garage + Social club houses.”
Robert I. Kauffman, Chairman & CEO, Aldel, said: “We couldn’t be more excited to work with McKeel and his team to help them grow and reach our collective goals. We ran an extensive process, and Hagerty represented what we were looking for in a partner for Aldel and our stockholders. Hagerty offers a highly differentiated growth story with a large market opportunity. The company also has a proven financial profile with a predictable and consistent revenue model and strong corporate culture and leadership model. We believe our complimentary skills and contacts will further accelerate the Hagerty flywheel.”