Galaxy Digital acquires BitGo for $1.2 billion
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Answer Galaxy Digital acquires BitGo for $1.2 billion
Galaxy Digital, the cryptocurrency-focused financial services company run by Michael Novogratz, announced that it has agreed to buy BitGo, a regulated crypto-custodian company.
According to source The deal was valued at $1.2 billion between stock and cash.
Under the terms of the deal, BitGo shareholders will receive 33.8 million newly issued shares of Galaxy Digital’s common stock and approximately $265 million in cash, which means about $1.2 billion based on the closing price of Galaxy Digital’s stock on May 4.
Last month, leaks surfaced that the two companies were in talks about a potential deal.
After the acquisition announcement appeared, Mr. Novogratz, CEO and founder of Galaxy Digital, told:
The acquisition of BitGo establishes Galaxy Digital as a one-stop shop for enterprises and significantly accelerates our mission to institutionalize the digital currency and blockchain ecosystems.
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The deal is another sign of the intensification of mergers and acquisitions in the cryptocurrency industry following PayPal’s agreement in March to buy cryptocurrency custodian Curv.
The new acquisition also highlights the importance of custodians to this class of digital currencies.
Cryptocurrencies are more like cash or diamonds than a stock with a certificate of ownership.
The new acquisition, more specifically, will offer Galaxy the possibility to become a major broker.
Whereas, the company cannot be a principal intermediary without guardianship.
Last year, BitGo was reported to have been in takeover talks with fintech giant PayPal, which offered up to $750 million in cash to acquire it, but the deal appears to have gone through for unknown reasons.
To be the acquisition of “BitGo” by Galaxy.
BitGo shareholders will own about 10% of Galaxy.
BitGo CEO Mike Belchy will become the executive vice president of Galaxy Digital and a member of the company’s board of directors.
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The transaction is expected to close in the fourth quarter of 2021.
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