Michael Novogratz’s Galaxy Digital Ventures has agreed to acquire U.S.-based digital asset services firm BitGo in a cash and stock deal valued at about $1.2 billion to become the first full-service financial platform for digital assets. The consideration consists of 33.8 million of newly issued shares of Galaxy Digital common stock and $265 million in cash.
Galaxy Digital will also issue incremental shares of its common stock to BitGo’s shareholders in exchange for BitGo’s net digital assets at close.
“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,” said Novogratz, CEO and Founder of Galaxy Digital.
BitGo’s product suite is complementary to Galaxy Digital’s existing offerings across Asset Management, Trading, Investment Banking, and Mining. The combined business will be uniquely positioned to serve the entirety of clients’ financial services needs, whether they are storing assets or transacting.
The acquisition will also expand Galaxy Digital’s geographic reach, with the addition of a West Coast office in San Francisco, as well as global offices and a significant international client base.
BitGo shareholders will own approximately 10 percent of the pro forma company. Galaxy Digital will retain substantially all current BitGo employees and enter into employment agreements with key members of the management team.
Upon closing, BitGo CEO and Founder Mike Belshe will join as Deputy CEO of Galaxy Digital and will become a member of the company’s Board of Directors.
The transaction, approved by the boards of directors of both Galaxy Digital and BitGo, is expected to close in the fourth quarter of 2021, subject to closing conditions and regulatory approvals.
Galaxy Digital’s shareholders will also have to approve its domestication as a Delaware corporation and the internal restructuring. Following domestication, it plans for a U.S. listing later this year.
BitGo was the first independent regulated custodian, purpose-built for digital assets. It is a leading custody provider with over $40 billion of assets under custody, serving over 150 exchanges and over 400 institutional clients. BitGo processes over 30 billion monthly transactions and supports the custody of more than 400 coins and tokens
BitGo was granted a DFS Trust Charter license under New York Banking Law by the New York State Department of Financial Services in March this year. It was backed by Galaxy Digital and Goldman Sachs, among others.
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