Digital Currency Industry’s Largest M&A: Galaxy Digital to Acquire BitGo for $1 Billion

Bitcoin-focused company Galaxy Digital Holdings Ltd. has revealed that it has agreed to acquire BitGo Inc. for $1.2 billion, the largest merger and acquisition in the digital currency industry to date.

The Wall Street Journal revealed late on May 5 that bitcoin-focused company Galaxy Digital Holdings Ltd. has agreed to acquire BitGo Inc. for $1.2 billion, the largest merger in the digital currency industry to date.

Upon closing of the deal, Mike Belshe will join Galaxy Digital as deputy CEO and will become a member of the company’s board of directors.

The transaction has been approved by the boards of Galaxy Digital and BitGo, with Citi now acting as financial advisor to Galaxy Digital on its acquisition of BitGo and Galaxy Digital’s investment banking division assisting with the transaction.

The acquisition is expected to close in the fourth quarter of 2021, subject to Galaxy Digital’s shareholder approval, the reorganization of Galaxy Digital into a Delaware corporation and the internal reorganization described below, as well as certain related matters and other closing conditions and regulatory approvals related to the acquisition.

In an interview, Galaxy founder and CEO Mike Novogratz stated.

“The acquisition of BitGo makes Galaxy Digital an institutional one-stop platform and significantly accelerates our mission to build our digital asset ecosystem and complete the institutionalization of blockchain technology.

With this acquisition, we will have the technology, solutions and people power to bring unique value to our customers and contribute to the long-term growth our combined businesses will drive. We are excited to welcome Mike Belshe and the talented BitGo team to Galaxy Digital.”

At the same time, he said, “In order for cryptocurrencies to accomplish this revolutionary change, we need bigger companies that can compete with the traditional financial majors.”

Mike Belshe, CEO and founder of BitGo, said, “Joining Galaxy Digital represents the beginning of an exciting new chapter for us as we are able to offer more financial solutions to our existing clients, and we now have a best-in-class infrastructure that enables us to provide more companies, institutions and high net worth investor clients with optimal digital asset services.”

According to details of the terms of the merger, the acquisition will be paid for by way of 33.8 million newly issued shares of Galaxy Digital common stock and $265 million in cash, for an hourly price of approximately $1 billion based on Galaxy Digital’s closing price of $1.20 on that date, May 4, 2021, although certain adjustments and deferred purchases may be made, among other things.

Galaxy Digital will return to the U.S. market
In connection with the acquisition of Galaxy Digital, a U.S. company listed on the Toronto, Canada market, Galaxy Digital also announced that its board of directors has approved the acquisition of Galaxy Digital Holdings Ltd (” Galaxy Digital “) and Galaxy Digital Holdings LP (“OpCo”) in a proposed reorganization.

Galaxy Digital and OpCo will be moved from the Cayman Islands to Delaware to form a new company, Galaxy Digital Pubco Inc.

Furthermore, PubCo intends to apply to list its Class A shares on a U.S. stock exchange, with the expectation of increasing access to U.S. capital markets, increasing flexibility for future equity and debt capital market demand, and increasing Galaxy Digital’s visibility in the United States.

The acquisition will enable Galaxy Digital to become a digital currency focused financial services company with over $40 billion in assets under custody on its platform.

The combined company will offer a range of products and services aimed primarily at institutional investors, including trading, custody and asset management, investment banking, prime lending, tax services, and even mining operations.

Analysts say the deal gives Galaxy Digital a significant advantage, with the terms of the merger indicating that

Bitgo will introduce several new lines of business to Galaxy Digital, including regulated client custody solutions from BitGo Trust Company in South Dakota, New York, Switzerland and Germany. The user scale adds over 400 new global customers to Galaxy Digital.

Galaxy Digital will add more than 50 engineers and key product and security infrastructure personnel to accelerate product innovation and development capabilities, and the company will add a West Coast office in San Francisco, global offices and a significant international customer base, expanding the company’s geographic reach.

Why did BitGo choose Galaxy?
BitGo is a digital asset custody provider that was founded in 2013 by Mike Belshe and Ben Davenport. Publicly available information shows that it has over $40 billion in assets under custody and provides services to over 150 exchanges and 400 institutional clients supporting the custody of over 400 coins and tokens.

As early as November last year, PayPal revealed that it had been in talks with BitGo and revealed that it was willing to buy BitGo for $750 million in cash. however, in March this year, it was suspected that the talks between the two sides collapsed, probably mainly because PayPal did not pay enough money.

Sources said that in March PayPal put out the news that it might acquire the cryptocurrency storage company Curv for as much as $500 million.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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