According to a Galaxy Digital press release on 5 May, the combined businesses will be uniquely positioned to serve the needs of institutions looking to store digital assets or use them for transacting. Under the terms of the deal, BitGo shareholders will get 33.8 million of newly issued Galaxy Digital shares and $256 million in cash. Based on Galaxy Digital’s closing share price on 4 May, the transaction is valued at around $1.2 billion.
The acquisition is expected to close in Q4 2021, as Galaxy Digital will use its balance sheet to fund the cash consideration. The company further said it will retain all current BitGo employees and enter into further employment agreements with key members of the company’s management team.
Mike Novogratz, the founder and CEO of Galaxy Digital, said the acquisition will unlock unique value for the company’s clients and drive long-term growth for the combined businesses.
“The acquisition of BitGo establishes Galaxy Digital as a one-stop-shop for institutions and significantly accelerates our mission to institutionalize digital asset ecosystems and blockchain technology,” he said in the company’s release.
Over 400 new global clients will join Galaxy Digital as a result of the acquisition, with multiple new sources of business lines introduced to the company as well. The regulated client custody solution from BitGo Trust Companies in South Dakota, New York, Switzerland, and Germany will introduce institutional-grade levels of security and operational performance to Galaxy Digital.
Last year, it was rumored that BitGo was in acquisition talks with PayPal. According to Bloomberg, sources familiar with the matter said that the deal could fall apart as PayPal could opt to buy other targets. In March 2021, the payments giant confirmed it had acquired crypto security company Curv.