TRAVERSE CITY, Mich. - Hagerty, Inc. (NYSE: HGTY), a leading specialty vehicle insurance provider, announced the successful completion of its exchange offer and consent solicitation for various series of its outstanding warrants. The exchange offer, which allowed warrant holders to trade their warrants for shares of the company's Class A common stock, expired on July 2, 2024, with significant holder participation.
The company reported that 87.3% of the outstanding Public Warrants, 98.4% of the Private Placement Warrants, and 97.6% of the PIPE Warrants were validly tendered and not withdrawn before the offer concluded. These percentages surpass the 50% consent threshold required to amend the warrant agreements. As a result, Hagerty and Continental Stock Transfer & Trust Company enacted the amendments on July 3, 2024.
Following the amendments, Hagerty exercised its right to mandate the exchange of the remaining warrants for 0.18 shares of Class A Common Stock per warrant, a 10% lower ratio than the original offer. The final exchange is scheduled for 5:00 p.m. Eastern time on July 22, 2024, after which no warrants will remain outstanding. The last trading day for the Public Warrants on the New York Stock Exchange is expected to be July 19, 2024.
D.F. King & Co., Inc. served as the information agent and consent solicitor for the offer and consent solicitation. Hagerty has stated that the settlement of the exchanged warrants is anticipated to occur around July 5, 2024.
Hagerty is recognized for its dedication to the automotive enthusiast community, offering not only insurance but also valuation data, auction services, events, and a community for car enthusiasts. The company operates internationally, with a presence in Canada and the U.K., and has a significant membership base through the Hagerty Drivers Club.
This article is based on a press release statement.
In other recent news, Hagerty reported a strong Q1 performance in 2024, with significant growth in both commission and marketplace revenue. The company's net income increased by $23 million, and adjusted EBITDA grew by $21 million, contributing to improved operating margins. Hagerty's 2024 outlook remains positive, forecasting a revenue growth of 15-17% and a net income between $61 million to $70 million.
The company's commission revenue rose by 19%, driven by gains in written premiums and strong underwriting results. Meanwhile, marketplace revenue saw a surge of 58%, attributed to an increase in listings and higher auction sales. Additionally, Hagerty has $91 million in long-term debt, with $29 million as back leverage against collectible car loans.
In terms of strategic initiatives, Hagerty is focusing on expanding its collectible car marketplace and controlling underwriting profits. The company is also preparing for the launch of a new product, Enthusiast Plus, in 2025 and 2026. An investor event is scheduled for May 31, where Hagerty will discuss these long-term growth strategies in more detail.
InvestingPro Insights
As Hagerty, Inc. (NYSE: HGTY) navigates through its recent exchange offer and consent solicitation, the market is responding positively to the company's strategic moves. According to InvestingPro, Hagerty is not only making headway with its warrant exchange but is also showing promising financial metrics that may interest investors.
InvestingPro data highlights a robust 25.7% revenue growth in the last twelve months as of Q1 2024, indicating the company's ability to expand its revenue streams effectively. Additionally, the company's Price to Earnings (P/E) Ratio has adjusted to a more favorable 55.62, suggesting that the stock may be undervalued relative to its earnings potential. Furthermore, the Price / Book ratio stands at 39.64, which, while on the higher side, could reflect investor confidence in Hagerty's asset value and future growth prospects.
Among the InvestingPro Tips, it's noteworthy that analysts have revised their earnings upwards for the upcoming period, which could be a sign of positive performance on the horizon for Hagerty. Moreover, the company is trading at a low P/E ratio relative to near-term earnings growth, potentially offering an attractive entry point for investors who are bullish on the company's future. With these tips in mind, readers interested in deeper analysis can find more than 10 additional InvestingPro Tips on the InvestingPro platform.
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As Hagerty continues to serve the automotive enthusiast community and expand its business operations, these financial metrics and analyst revisions provide a glimpse into the company's potential trajectory and the growing investor interest in its stock.
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