Old cars mean very big money

If you own a historic or collectible vehicle, there’s a very good chance that you’re already a customer of Hagerty, Inc. of Traverse City, Michigan, because Hagerty is already a prominent insurer of old cars and trucks, having issued specialized policies covering some 2 million such vehicles worldwide. Tomorrow morning, Hagerty will – literally – ring in a major new chapter in the firm’s existence, as it begins trading publicly under the symbols HGTY and HGTY.WS. Hagerty executives will personally get to clang the iconic bell tomorrow morning at the New York Stock Exchange as trading commences.

The emergence of Hagerty as a publicly traded enterprise follows its Special Purpose Acquisition Company operating merger with Aldel Financial Inc., an equity firm that specializes in large-scale capitalization. According to the announcement of the merger from Hagerty, institutional investors such as State Farm and Markel Corporation have supplied a $704 million PIPE (the acronym stands for Private Investment in Public Equity) financial commitment that will assign Hagerty a pro forma enterprise value – essentially, the firm’s new level of market capitalization – estimated at $3.1 billion. That total will free up some $265 million, which the firm has already earmarked for digital strategies. It’s very easy to see what’s made Hagerty a very hot property in both the automotive and Wall Street worlds. Hagerty has experienced a 29 percent annual revenue growth rate between 2018 and 2020, and boasts a staggering 90 percent customer-retention rate. Hagerty’s about a lot more than insurance now: It owns digital properties, magazines, a market-valuation service and most recently, a portfolio of some of the most prestigious automotive events in the country including the Amelia Island Concours d’Elegance, the Concours d’Elegance of America, the Greenwich Concours d’Elegance, the California Mille, and the Motorworks Revival. Hagerty’s IPO is a seismic event in the old-car world, establishing it as one of the hobby’s most powerful economic and social forces.

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