SCHEDULE: Hagerty Holding Corp. Discloses 51.4% Stake

Hagerty Holding Corp. has filed an amended Schedule 13D, detailing its beneficial ownership of Hagerty, Inc. Class A common stock and outlining various agreements and transactions.

Summary

• Hagerty Holding Corp. (HHC) reports beneficial ownership of 144,414,656 shares of Class V Common Stock and an equal number of OpCo Units in Hagerty, Inc.
• These Class V shares and OpCo Units are exchangeable for an equal number of Class A Common Stock shares or cash at the issuer's option.
• HHC's holdings represent approximately 51.4% of the outstanding Class A Common Stock, and HHC controls approximately 65.3% of the voting power.
• The filing details an Underwriting Agreement dated November 10, 2026, where HHC sold 11,500,000 shares of Class A Common Stock.
• A 60-day lock-up agreement is in effect for HHC, restricting the sale or disposition of certain securities until 60 days after November 10, 2026.
• The filing also references an Investor Rights Agreement, an Amended and Restated Registration Rights Agreement, and an Amended and Restated Exchange Agreement.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing as moderately positive, reflecting significant ownership and recent stock activity, balanced by ongoing strategic agreements and potential future exchanges.

Positives

• Hagerty Holding Corp. maintains a controlling stake (51.4% of Class A Common Stock and 65.3% of voting power) in Hagerty, Inc., indicating significant influence.
• The company has successfully executed a public offering, selling 11,500,000 shares of Class A Common Stock.
• Various agreements are in place (Investor Rights, Registration Rights, Exchange Agreement) that provide structure and rights for key stakeholders.

Negatives

• The 60-day lock-up agreement restricts HHC's ability to sell or transfer its securities, limiting immediate liquidity.
• The exchange of Class V Common Stock and OpCo Units for Class A Common Stock is at the Company's option, introducing uncertainty for HHC regarding the form of settlement (stock or cash).

Risks

• The filing notes that HHC may not have the right to acquire the Class A Common Stock underlying its Class V Common Stock and OpCo Units, and does not concede beneficial ownership of those shares.
• The Tax Receivable Agreement (TRA) involves potential future payments to Legacy Unit Holders, which could be accelerated under certain conditions (breach, bankruptcy, early termination), leading to a lump-sum payment obligation for the Company.
• The Investor Rights Agreement outlines director nomination rights that are contingent on HHC maintaining certain ownership thresholds, implying a risk of reduced governance influence if ownership falls below these levels.

Future Outlook

Hagerty Holding Corp. will continue to review its investment in Hagerty, Inc. and may take actions such as purchasing additional shares, surrendering Class V Common Stock and OpCo Units for Class A Common Stock or cash, or changing its investment intentions. Specific exchange rights for certain family members and trusts are detailed, with limitations based on maintaining a minimum voting power percentage.

Management Comments

• Hagerty Holding Corp. expects to review from time to time its investment in the Company and, depending on its applicable legal, regulatory and contractual obligations, the Company's financial position, business prospects and investment strategy, and prevailing market, economic and industry conditions, HHC may in the future take such actions with respect to its investment in the Company as it deems appropriate.
• The reporting person may not have the right to acquire the shares of Class A Common Stock underlying the Class V Common Stock and OpCo Units, and the reporting person does not concede that it is the beneficial owner of any shares of Class A Common Stock.

Industry Context

StockSavvy.ai notes that this filing pertains to a significant ownership stake in Hagerty, Inc., a company operating in the specialty insurance and automotive lifestyle sector. The transactions and agreements detailed reflect the complex capital structure and governance arrangements typical for companies that have undergone business combinations or SPAC mergers, aiming to balance founder control with public market access and investor rights.

Comparison to Industry Standards

• The structure involving Class V Common Stock and OpCo Units is a common mechanism in SPAC transactions to maintain control for founders or initial investors while allowing for public trading of Class A shares.
• The Investor Rights Agreement, which grants director nomination rights based on ownership thresholds, aligns with industry practices for significant shareholders to ensure representation on the board.
• The lock-up agreement period of 60 days following a public offering is standard in the industry to prevent immediate selling pressure and stabilize the stock price post-offering.

Corporate Governance

Related Party Transactions

• Hagerty Holding Corp. (HHC) is party to various agreements with Hagerty, Inc. (the issuer), including the Underwriting Agreement, Investor Rights Agreement, Amended and Restated Registration Rights Agreement, and Amended and Restated Exchange Agreement.
• McKeel Hagerty, CEO of Hagerty, Inc., is a stockholder of HHC and has voting power and exchange rights.
• Tammy Hagerty, sister of McKeel Hagerty, is a stockholder of HHC and has voting power and exchange rights.
• The Kim Hagerty Revocable Trust, a beneficiary of which is related to the Hagerty family, is a stockholder of HHC and has voting power and exchange rights.
• The Tax Receivable Agreement involves payments from the Company to Legacy Unit Holders, including HHC and Markel, related to tax benefits.

Stakeholder Impact

• Shareholders: The controlling stake held by HHC and the ongoing exchange mechanisms influence voting power and potential dilution. The lock-up agreement temporarily restricts selling for HHC.
• Management: The CEO's (McKeel Hagerty) significant role within HHC and as CEO of Hagerty, Inc. highlights a close alignment of interests.
• Creditors/Suppliers: The company's financial health, influenced by its capital structure and potential future tax payments under the TRA, could impact its ability to meet obligations.
• Founders/Key Family Members: Specific provisions for exchange rights and voting power ensure continued influence and liquidity options for key family members and trusts.

Next Steps

• Hagerty Holding Corp. will continue to review its investment and may engage in further purchases or exchanges of securities.
• The lock-up period for Hagerty Holding Corp. will expire 60 days after November 10, 2026, potentially allowing for further sales or transfers.
• The company may elect to settle exchanges of Class V Common Stock and OpCo Units with Class A Common Stock or cash.

Key Dates

Recommendation

The filing indicates a stable, controlling ownership structure with ongoing strategic agreements. While the recent stock sale and lock-up period suggest a period of consolidation, the underlying business and future exchange possibilities warrant a 'hold' recommendation, pending further operational and financial developments.

Keywords

Schedule 13D, Hagerty, Inc., Hagerty Holding Corp., Class A Common Stock, Class V Common Stock, OpCo Units, Underwriting Agreement, Lock-Up Agreement