Shares of Hagerty Inc. (NYSE: HGTY) moved lower in extended trading, declining 2.3% following an announcement from Hagerty Holding Corp. (HHC) that it plans to sell 8.25 million shares of the company’s Class A Common Stock in an underwritten secondary public offering.
The notice states that the Selling Stockholder also expects to grant the underwriters a 30-day option to purchase up to an additional 1,237,500 shares of Class A Common Stock. That option, if exercised, would increase the number of shares sold by the Selling Stockholder within the terms of the offering.
Hagerty Inc. itself will not collect any proceeds from this sale. The Selling Stockholder will bear the underwriting discount attributable to its sale of the Class A Common Stock, while Hagerty has agreed to bear the remaining expenses associated with the offering.
HHC has disclosed that the net proceeds it receives from this transaction are intended to be used to effect a redemption, for the benefit of the Kim Hagerty Revocable Trust, of a corresponding number of HHC shares. The filing identifies Wells Fargo Securities and J.P. Morgan as representatives of the underwriters and as lead bookrunning managers for the offering.
Hagerty Inc. operates in the vehicle insurance market, providing products and services aimed at driving enthusiasts. The company reports protecting 3.0 million vehicles across the United States, Canada and the United Kingdom.
Summary of transaction facts:
- Offering size announced: 8.25 million Class A Common Stock shares.
- Underwriter option: 30-day option to purchase up to 1,237,500 additional shares.
- Proceeds: Hagerty will not receive proceeds; Selling Stockholder will use net proceeds to redeem a corresponding number of HHC shares for the benefit of the Kim Hagerty Revocable Trust.
- Underwriters and bookrunners: Wells Fargo Securities and J.P. Morgan.
The announcement and associated terms were followed by the modest after-hours price move, reflecting market reaction to the transaction details disclosed by HHC.