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- Galaxy Digital is all set to acquire BitGo for $1.2B, attributing to 33.8M newly issued Galaxy Digital shares and $265M in cash.
- The deal, expected to close in Q4 2021, will place BitGo shareholders to own almost 10% of the firm.
- CEO Michael Novogratz says the acquisition will turn Galaxy into “a one-stop-shop for institutions.”
Michael Novogratz’s cryptocurrency-focused financial services firm, Galaxy Digital, is set to acquire the U.S.-regulated crypto custodian, BitGo, for $1.2 billion in stock and cash.
Acquisition Announcement
Announced Wednesday, the deal outlines Galaxy Digital to pay in 33.8 million newly issued Galaxy Digital shares (GLXY.TO) and $265 million cash, which equates to over $1.2 billion at the closing price of $34.26 on Tuesday. As for Galaxy, it will be closer to realizing its stated intention of becoming a prime broker. One can’t be a prime broker without custody.
CEO BitGo Joins Galaxy Board
The deal is expected to close in the fourth quarter of 2021, subject to regulatory scrutiny and Galaxy shareholders’ approval. Following the acquisition, BitGo shareholders will own almost 10% of the combined entity. Mike Belshe, co-founder and CEO of BitGo, will become deputy CEO and occupy a chair in the board of directors at Galaxy.
Novogratz’s Take On The Acquisition
Galaxy Digital’s BitGo acquisition will turn it into “a one-stop-shop for institutions” and “significantly accelerate” their “mission to institutionalize digital asset ecosystems and blockchain technology,” noted Galaxy founder and CEO, Mike Novogratz. The merger-boosted technological solutions and human resource power will help “unlock unique value” for clientele and “drive long-term growth” for their business.
More About BitGo
Founded in 2013, BitGo offers crypto custody, trading, prime lending, portfolio, and tax management services. The firm owns assets worth $40 billion under custody and serves over 150 exchanges and 400 institutional clients. In December 2020, BitGo was in acquisition talks with fintech giant PayPal offering $750 million in cash, but the deal fell through. Later PayPal acquired crypto custodian Curv under its March agreement for an undisclosed amount.
Galaxy Digital: On Its Way
The Canada-listed Galaxy said it’ll gain around 400 global net new clients from BitGo and plans to use its balance sheet to fund the cash consideration. Moreover, the crypto merchant bank also unveiled intent to “undergo a domestication process” in preparation for a U.S. listing later this year.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
