Merger ADF.U

Hagerty and Aldel Financial Announce Merger Agreement

, SPAC Research

Hagerty, an automotive enthusiast brand offering a specialty automotive insurance platform built upon a membership organization for car lovers, and Aldel Financial Inc. (NYSE: ADF), 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 specialty insurance provider focused on the global automotive enthusiast market and an automotive enthusiast brand offering integrated membership products and programs. Hagerty is home to Hagerty Drivers Club, Hagerty DriveShare, Hagerty Valuation Tools, Hagerty Media, Hagerty Drivers Club magazine, MotorsportReg, Hagerty Garage + Social, the Amelia Island Concours d'Elegance, the Concours d'Elegance of America, the Greenwich Concours d'Elegance, the California Mille, Motorworks Revival and more.

The transaction is expected to deliver up to $820 million of gross proceeds to the combined company, including the contribution of up to $116 million of cash held in Aldel’s trust account from its initial public offering in April 2021, assuming no redemptions. The combination is supported by a $704 million PIPE at $10.00 per share plus 18% warrant coverage led by strategic investors State Farm and Markel Corporation and commitments from a group of leading institutional and private investors.

Existing Aldel stockholders who don’t exercise their redemption rights will roll 100 percent of their equity into the combined company. All references to available cash from the trust account and retained transaction proceeds are subject to any redemptions by the public stockholders of Aldel and payment of transaction expenses.

The transaction, which has been unanimously approved by Aldel’s board of directors and the independent members of Hagerty’s board, is expected to close in the fourth quarter of 2021, and is subject to approval by Aldel’s stockholders and Hagerty’s owners and other customary closing conditions, including any applicable regulatory approvals. Over 40% of Aldel’s stockholders have signed voting agreements in favor of the Transaction. The minimum cash condition will be satisfied via the committed PIPE.

J.P. Morgan Securities LLC (J.P. Morgan) is serving as financial advisor to Hagerty and Global Leisure Partners LLC (GLP) and ThinkEquity LLC (ThinkEquity) are serving as financial advisor to Aldel in connection with the business combination. Sidley Austin LLP is serving as legal advisor to Hagerty. Loeb & Loeb LLP is serving as legal advisor to Aldel. GLP and ThinkEquity are serving as capital markets advisors to Aldel. J.P. Morgan and GLP are serving as co-placement agents on the PIPE. Mayer Brown LLP and Jones Day are serving as legal advisors to the placement agents on the PIPE.

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