SCHEDULE: Hagerty Holding Corp. Discloses 56.5% Stake in Hagerty Inc.

Hagerty Holding Corp. has amended its Schedule 13D filing to reflect its beneficial ownership of 155,914,656 shares of Class V Common Stock and OpCo Units in Hagerty, Inc., representing approximately 56.5% of the Class A Common Stock.

Summary

• Hagerty Holding Corp. (HHC) has filed an amendment to its Schedule 13D, detailing its beneficial ownership of Hagerty, Inc. securities.
• HHC holds 155,914,656 shares of Class V Common Stock and an equal number of OpCo Units, which are exchangeable for Class A Common Stock or cash.
• This holding represents approximately 56.5% of Hagerty, Inc.'s Class A Common Stock, with HHC controlling about 66.1% of the voting power.
• The filing details HHC's investment purpose and potential future actions regarding its stake.
• It also outlines an Underwriting Agreement dated September 9, 2026, where HHC sold 10,637,500 shares of Class A Common Stock at $11.95 per share.
• A 60-day lock-up agreement is in effect for HHC following the sale, restricting the disposal of certain securities.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this filing as neutral to slightly positive, reflecting ongoing strategic adjustments and significant ownership stakes rather than immediate performance indicators.

Positives

• Hagerty Holding Corp. maintains a significant controlling stake (56.5% of Class A Common Stock, 66.1% voting power) in Hagerty, Inc., indicating strong foundational support.
• The company successfully executed an underwritten sale of 10,637,500 shares of Class A Common Stock on September 9, 2026, at a price of $11.95 per share, generating capital.
• The Investor Rights Agreement ensures HHC, Markel, and State Farm have board representation rights as long as they maintain certain ownership thresholds, promoting aligned governance.
• The Amended and Restated Exchange Agreement provides a mechanism for HHC and Markel to exchange OpCo Units for Class A Common Stock or cash, offering liquidity and strategic flexibility.

Negatives

• The filing indicates a substantial portion of Class A Common Stock is held by HHC, which could limit the free float available to other investors.
• The lock-up agreement restricts HHC's ability to sell shares for 60 days post-September 9, 2026, potentially delaying further market adjustments.
• The Tax Receivable Agreement outlines potential future payments to legacy unit holders, which could impact the company's cash flow and profitability.
• The potential for HHC to be required to surrender shares for exchange under specific circumstances (e.g., death of key individuals) introduces a degree of uncertainty regarding future ownership structure.

Risks

• HHC's significant voting power (66.1%) could lead to concentrated decision-making, potentially disadvantaging minority shareholders.
• The terms of the Amended and Restated Exchange Agreement and Tax Receivable Agreement involve complex financial arrangements that could lead to future obligations or disputes.
• The lock-up agreement, while standard, temporarily restricts a large block of shares from being traded.
• The potential for HHC to cease holding at least 55% of the voting power of the company under certain exchange conditions could alter control dynamics.

Future Outlook

Hagerty Holding Corp. expects to review its investment in Hagerty, Inc. periodically and may take actions such as purchasing additional shares, exchanging securities, or changing its investment intentions based on market conditions and company performance. Specific exchange rights for up to 2% of fully-diluted shares become available annually starting on the third anniversary of December 2, 2021, subject to maintaining a 55% voting power threshold.

Management Comments

• Hagerty Holding Corp. acquired shares for investment purposes.
• HHC may purchase additional shares, surrender Class V Common Stock and OpCo Units for Class A Common Stock or cash, or change its investment intentions.
• The company's management, through HHC, retains significant control and strategic options regarding its investment in Hagerty, Inc.

Industry Context

StockSavvy.ai notes that this filing reflects a significant ownership consolidation and strategic financial maneuvering within the specialty insurance and automotive lifestyle sector. The structure involving Class V stock and OpCo units, along with exchange rights and tax receivable agreements, is complex and typical of companies transitioning from private to public or undergoing significant restructuring to manage control and tax implications.

Comparison to Industry Standards

• The structure of dual-class stock (Class A and Class V) with differing voting rights is a common strategy in the tech and growth sectors to allow founders or early investors to retain control while raising capital. Hagerty Inc.'s use of this, with Class V having 10 votes per share, aligns with this trend.
• The existence of an Investor Rights Agreement granting board nomination rights to major shareholders (HHC, Markel, State Farm) is standard practice for significant private equity or strategic investors in pre-IPO or post-IPO companies to ensure alignment and oversight.
• The Underwriting Agreement and associated lock-up period for a large shareholder sale are typical for managing the market impact of significant equity offerings.
• The Amended and Restated Exchange Agreement, allowing for the redemption of OpCo Units for Class A stock or cash, is a common feature in 'OpCo/ParentCo' structures (like Hagerty's) to provide liquidity to unit holders and simplify the capital structure over time.

Corporate Governance

Related Party Transactions

• Hagerty Holding Corp. (HHC) holds Class V Common Stock and OpCo Units exchangeable for Class A Common Stock or cash.
• HHC is party to the Amended and Restated Exchange Agreement with Hagerty, Inc. and OpCo, allowing for the surrender of paired interests for Class A Common Stock or cash.
• HHC is a party to the Tax Receivable Agreement with Hagerty, Inc. and OpCo, entitling it to 85% of certain tax benefits realized by the company.
• McKeel Hagerty, CEO of Hagerty, Inc., is a stockholder of HHC and has voting power over HHC's holdings.
• Tammy Hagerty, sister of McKeel Hagerty, is also a stockholder of HHC and has voting power.

Stakeholder Impact

• Shareholders: The significant voting power held by HHC (66.1%) could influence corporate decisions. The sale of shares by HHC may impact stock price volatility.
• Management: The control structure ensures alignment between HHC (and its key family members) and the company's strategic direction.
• Creditors/Suppliers: The company's financial stability, supported by significant ownership and ongoing capital management, is generally positive.
• Employees: The governance structure and potential future capital raises or exchanges could indirectly affect employee stock options or overall company strategy.

Next Steps

• Hagerty Holding Corp. will continue to review its investment in Hagerty, Inc.
• HHC may engage in further purchases of Class A Common Stock or other securities.
• HHC may surrender Class V Common Stock and OpCo Units for Class A Common Stock or cash.
• Annual exchange rights for up to 2% of fully-diluted shares become available starting on the third anniversary of December 2, 2021.
• The 60-day lock-up period for HHC's sold shares will expire.

Key Dates

Recommendation

The filing is primarily an update on ownership structure and a report of a secondary offering by a major shareholder. While the company maintains significant control and has executed a capital raise, there are no new fundamental performance indicators or significant strategic shifts presented that would warrant a buy or sell recommendation. The complexity of the ownership structure and agreements suggests a need for further monitoring.

Keywords

Hagerty Holding Corp., Hagerty Inc., Schedule 13D, Class V Common Stock, Class A Common Stock, OpCo Units, Beneficial Ownership, Underwriting Agreement