Acquiring the Concours d’Elegance of America and planning its move to the Detroit Institute of Arts next year offers a glimpse into the rationale behind drawing up a deal to bring Michigan-based Hagerty to the public.
As McKeel Hagerty, the company’s CEO put it, expect “more great auto things to come.”
Hagerty, which is headquartered in Traverse City and specializes in classic car insurance, and Aldel Financial announced a merger agreement on Wednesday that would see the company go public and trade on the New York Stock Exchange under the ticker symbol HGTY.
McKeel Hagerty said it will take a few months to fully close the $ 3.13 billion deal, but after that the company will be ready for a future that car culture fans should look forward to. Hagerty has approximately 1,550 employees, including 760 in Traverse City and a “significant presence” in Ann Arbor, and the company anticipates several hundred more.
Hagerty, which insures more than 2 million vehicles worldwide but also has other automotive projects such as the member-oriented Hagerty Drivers Club,will keep its Michigan home base, managed by the same team, and largely owned and controlled by the Hagerty family, McKeel Hagerty said.
The company it is merging with, Aldel Financial, is a purpose-built acquisition company “whose business is to conduct a merger” or related activity, according to a press release. Aldel raised $ 116 million in an IPO in April. The merger with Hagerty is expected to generate gross proceeds of $ 820 million. Aldel’s CEO is Robert Kauffman, co-founder of the Fortress Investment Group and, according to CNBC, racing team owner and driver.
State Farm is among the investors in the deal. State Farm and Hagerty recently announced that Hagerty will manage State Farm’s new classic car insurance program.
McKeel Hagerty said the company, founded in 1984, is geared for growth. Hagerty has expanded its auto event portfolio. These now include the Amelia Island Concours d’Elegance in Florida and the Concours d’Elegance of America, which finished last month at the Inn at St. John’s in Plymouth.
The move of the Concours d’Elegance of America to Detroit in the fall of 2022, the exact date of which is yet to be determined, is likely to mean an expansion of the event. McKeel Hagerty said the plan is to work not only with the DIA but also with neighboring institutions.
More:Top collector’s cars will compete in the Concours d’Elegance of America in DIA in 2022
Schools also play a role in planning these events, if possible to show school-age children the history and legacy of cars, he said, later noting that the company’s purpose is to save driving and car culture and at the same time being good stewards of special things cars.
The enthusiasm for high-end auto events seems to be at odds with the challenges traditional mainstream auto shows have been facing in recent years. Before the cancellations in connection with the corona virus last year, auto shows were already in a state of upheaval.
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McKeel Hagerty said that many luxury brands, especially those at the forefront of the market, are moving towards the various concours and “lifestyle events” where they can engage more directly with their target audience rather than “going out to the general public when they do.” “” Are a car company that only sells a few thousand cars a year. “
Despite the evolving nature of the auto industry, including the move to electrification, McKeel told Hagerty that the company is optimistic about the future. Vehicle powertrains will be electric, although a full transition will take decades, he said, but the electric future doesn’t mean the driving experience has to be so mundane that it scares people off.
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“Fast electric cars are fun, but if they just look like a jelly bean or something, it won’t be very attractive to future generations,” said McKeel Hagerty. “A lot of what makes people collect cars and have them for lifestyle enjoyment and enjoyment is their appearance and their performance and their feel.”
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