Hagerty, Inc. Form 8-K Summary
Business Context and Reporting Period
Hagerty, Inc. filed this Current Report on August 16, 2022, reporting the closing of a transaction involving Broad Arrow Group, Inc. The filing is a Regulation FD disclosure and does not report quarterly or annual financial results.
Transaction and Key Financial Information
- Hagerty’s subsidiary, The Hagerty Group, LLC, previously owned 39.74% of Broad Arrow, acquired in January 2022 for $15.25 million.
- On August 16, 2022, the remaining Broad Arrow stockholders contributed their 60.26% interest to The Hagerty Group, LLC.
- Consideration consisted of equity interests in The Hagerty Group, LLC and Hagerty, Inc.; the filing does not provide a clear valuation or amount of equity issued.
- Broad Arrow became a wholly owned subsidiary of The Hagerty Group, LLC and, consequently, part of Hagerty’s consolidated organization.
- The filing provides no revenue, profit, cash flow, margin, debt, liquidity, or other operating metrics.
Material Changes Versus the Prior Comparable Period
The material change is the increase in Hagerty’s ownership of Broad Arrow from 39.74% to 100%. The transaction expands Hagerty’s ownership of the automotive auction and marketplace business and follows the January 2022 minority investment.
Outlook, Commentary, Risks, and Unusual Items
Hagerty and Broad Arrow expect to leverage their respective product offerings and continue developing the Hagerty Marketplace, a digital platform intended to facilitate the buying, selling, and financing of collector vehicles. These statements are forward-looking and subject to business, market, execution, and other risks that may be beyond the company’s control.
The transaction was completed under an exemption from registration under the Securities Act. The filing does not disclose financing, cash consideration, purchase accounting, expected accretion or dilution, or specific integration costs.
Investor Verification Items
- Review the Contribution and Exchange Agreement and its omitted schedules and exhibits for the precise equity consideration, ownership terms, representations, and contingencies.
- Verify how Broad Arrow is reflected in subsequent consolidated financial statements, including purchase accounting and any noncontrolling-interest effects.
- Assess Broad Arrow’s contribution to revenue, earnings, cash flow, and liquidity after becoming wholly owned.
- Evaluate management’s progress and investment requirements for the Hagerty Marketplace.
- Consider the risks and assumptions underlying the company’s forward-looking statements.