Hagerty, a specialty insurer for automotive enthusiasts, has increased the size of its planned secondary stock stale to 9.7 million shares at $9.34 per share, according to a filing with the US Securities and Exchange Commission.
The offering, expected to raise about $86.5 million, will primarily facilitate the settlement of the estate of Kim Hagerty, a former leader in the family business who died in 2021.
Most of the shares are held by members of the Hagerty family, including CEO McKeel Hagerty. Proceeds will be used to redeem the family’s HHC shares, which will be exchanged ahead of the offering. HHC, the family holding entity, is owned by McKeel Hagerty, his sister Tammy Hagerty and the estate of their late sister, according to a Best Wire report.
HHC will offer 8.25 million class A shares, with an option for underwriters to purchase up to an additional 1.24 million shares. Aldel LLC will sell the remaining shares. Both HHC and Aldel plan to grant underwriters a 30-day option to acquire additional stock.
Hagerty, which became a public company in 2021 via a merger with Aldel Financial, counts State Farm and Markel Corp. among its major investors. In July, Hagerty signed a nonbinding letter of intent with Markel to take full control of underwriting and investment economics for its insurance operations.
Currently, Markel and HHC hold all Class V common stock which gives them significant influence over company decisions. Following the offering, they are expected to retain about 96% of the voting power, with majority control locked in until 2036 unless the class V shares are transferred under specific terms.
On the product side, Hagerty has begun rolling out its Enthusiast+ policy in Colorado, with national expansion planned over the next four years. Issued by Drivers Edge Insurance Co., a wholly owned subsidiary, the coverage targets modern enthusiast vehicles that are driven more regularly than traditional collector cars.
Both Drivers Edge and Hagerty Reinsurance Ltd. hold an A- (Excellent) financial strength rating from AM Best.
