Hagerty offers speciality insurance for classic and enthusiast vehicles. Credit: Prnewswire.com/PRNewsfoto/Hagerty.

Speciality auto insurance platform Hagerty has announced its plan to go public through a merger with Aldel Financial, a special purpose acquisition company.

The deal would value Hagerty at $3.13bn and is expected to deliver approximately $820m of gross proceeds to the combined firm, which includes a contribution of  $116m of cash held in Aldel’s trust account.

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The merger is supported by $704m private investment in public equity (PIPE) led by strategic investors State Farm and Markel and commitments from a group of other institutional and private investors.

Under the terms of the agreement, Aldel will be renamed as Hagerty after the deal closes, and its common stock is expected to be listed on the New York Stock Exchange under the ticker symbol HGTY.

Hagerty offers speciality insurance for classic and enthusiast vehicles and claims to have insured over two million vehicles globally.

The firm added that it has recorded over 25% compounded annual revenue growth rate over the last three years.

Hagerty CEO McKeel Hagerty said: “When it comes to fueling the insatiable passion of tens of millions of automotive enthusiasts, Hagerty is well-positioned as a leading speciality insurance provider with a unique subscription and membership model and portfolio of immersive automotive events, entertainment and valuation tools.”

Aldel Financial chairman & CEO Robert Kauffman said: “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.”

Aldel Financial’s board of directors and the independent members of Hagerty’s board have approved the merger.

It is expected to close in the fourth quarter of 2021 and is subject to approval by Aldel Financial’s stockholders and Hagerty’s owners and other customary closing conditions.