SCHEDULE: Hagerty Holding Corp. Sells 1.2M Class A Shares

Hagerty Holding Corp., the controlling shareholder of Hagerty, Inc., sold an additional 1.24 million Class A common shares following underwriters' option exercise.

Summary

• Hagerty Holding Corp. (HHC), the controlling shareholder of Hagerty, Inc., sold an additional 1,236,750 shares of Class A common stock at $8.9197 per share on August 13, 2025.
• This sale occurred following the exercise of an option by underwriters as part of an Underwriting Agreement dated August 7, 2025.
• HHC continues to beneficially own 166,552,156 shares of Class V Common Stock and OpCo Units, which are exchangeable for an equal number of Class A Common Stock or cash at the company's option.
• HHC's beneficial ownership represents approximately 62.4% of Class A Common Stock on a fully-diluted basis and controls approximately 66.0% of the company's total voting power.
• HHC is owned by members of the Hagerty family and related trusts, including CEO McKeel Hagerty and his sister Tammy Hagerty.

Sentiment

Score: 5

Explanation: The filing details a pre-arranged secondary share sale by a controlling shareholder, which is a neutral event in itself. The continued strong family control and structured liquidity mechanisms are positive for stability, balancing the potential overhang from the share sale.

Positives

• Hagerty Holding Corp. (HHC), owned by the Hagerty family, maintains significant control over Hagerty, Inc., holding approximately 66.0% of the voting power, ensuring stable long-term strategic direction.
• The Class V Common Stock structure, which grants 10 votes per share until December 2, 2036, reinforces the family's control and long-term vision.
• Structured exchange rights allow for controlled liquidity for the Hagerty family, with annual exchanges limited to 2% of outstanding Class A shares on a fully-diluted basis, and a protective clause preventing HHC from falling below 55% voting power until the 15th anniversary of the BC Closing.

Negatives

• The sale of 1,236,750 Class A common shares by a controlling shareholder, even if pre-arranged, increases the public float and could create a perception of insider selling or an overhang on the stock.
• The potential for future sales by Hagerty Holding Corp., including annual exchanges of up to 2% of Class A shares or larger sales to cover estate obligations upon the death of key family members, could introduce additional supply to the market.

Risks

• Potential for future sales of Class A Common Stock by Hagerty Holding Corp. (HHC) through annual exchanges of up to 2% of outstanding shares on a fully-diluted basis.
• Risk of increased market supply of Class A Common Stock if HHC surrenders Class V Common Stock and OpCo Units to cover estate obligations upon the death of McKeel Hagerty or Tammy Hagerty.
• The voting power of Class V Common Stock will reduce from ten votes to one vote per share upon transfer to a non-qualified transferee or by December 2, 2036, potentially altering the control structure over time.

Future Outlook

The filing outlines mechanisms for future adjustments to Hagerty Holding Corp.'s ownership, including annual exchange rights for Class V Common Stock and OpCo Units (up to 2% of outstanding Class A shares fully-diluted) and provisions for exchanges to cover estate obligations upon the death of key family members. These mechanisms are designed to provide liquidity while maintaining the family's significant voting control, with a condition that HHC must hold at least 55% of the issuer's voting power until the 15th anniversary of the BC Closing.

Industry Context

NA

Corporate Governance

Related Party Transactions

• Hagerty Holding Corp. (HHC), which is owned by members of the Hagerty family including CEO McKeel Hagerty, sold 1,236,750 shares of Class A Common Stock to underwriters. This constitutes a transaction involving a controlling shareholder and related parties.

Stakeholder Impact

• Shareholders: The sale of shares by a major holder increases the public float of Class A shares, potentially improving liquidity for other investors. However, it also introduces additional supply to the market.
• Hagerty Family (Controlling Shareholders): The transaction provides liquidity for Hagerty Holding Corp. and its underlying family members, while the governance structure ensures their continued significant voting control over the company.

Next Steps

• Annual periods commencing on the third anniversary of the BC Closing will allow McKeel Hagerty, Tammy Hagerty, or the Kim Hagerty Revocable Trust to require Hagerty Holding Corp. to exchange Class V Common Stock and OpCo Units for Class A Common Stock, up to 2% of the shares then outstanding on a fully-diluted basis.

Key Dates

Recommendation

The filing primarily details a secondary share sale by a controlling shareholder, which was part of a pre-existing underwriting agreement. While this increases the public float, the underlying business operations and financial performance are not addressed. The Hagerty family maintains substantial voting control, providing stability. Without further operational or financial updates, a 'hold' recommendation is appropriate, awaiting more comprehensive company performance data.

Keywords

Hagerty, SEC filing, Schedule 13D, Class A Common Stock, Class V Common Stock, Hagerty Holding Corp., HHC, share sale, secondary offering, beneficial ownership, corporate governance, family control