In the latest news, Galaxy Digital, a cryptocurrency-focused financial platform with Michael Novogratz as the forerunner, has announced their plans to purchase BitGo for $1.2 Billion in cash and stock. BitGo is a US regulated crypto custodian that will be sold to Galaxy Digital in the fourth quarter of 2021, according to the company’s announcement.
Upon the completion of the acquisition deal, Galaxy Digital will be able to position itself as one of the largest crypto companies targeting platforms.
Deets for the Deal
According to the announcement, both the companies Galaxy Digital and BitGo have agreed on a cash and stock deal. BitGo shareholders will receive $265 million in cash, whereas the remaining amount will be transferred in 33.8 M of Galaxy Digital’s newly issued common stock.
These stocks will give about 10 percent control of Galaxy Digital to the BitGo shareholders. Also, on the acquisition, BitGo will still retain its entire workforce, but BitGo CEO and founder Mike Belshe will join Galaxy Digital as its deputy chief executive.
Billionaire hedge fund manager Michael Novogratz released a statement mentioning,
“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 further added, “The power of the technology, solutions, and people we will have as a result of this acquisition will unlock unique value for our clients and drive long-term growth for our combined business.”
BitGo was founded in 2013 by Mike Belshe and has seen tremendous growth in the crypto-focused areas since the launch. The company managed to leverage the crypto world while it was still at its nascent stage and continuously grew with it. BitGo launched institution and lending brokerage services and has acquired quite a few potential-rich startups along the way.
The company stated that it currently holds over $40 billion of assets in 400 institutional clients and 150 exchanges that helped shoot up its value to $1.2 billion. Being acquired by Galaxy Digital was a much-planned and strategic decision as Mike Belshe mentioned in a statement,
“Joining Galaxy Digital represents an exciting new chapter for our business, as our current clients gain access to a wide set of financial solutions.”
This acquisition will potentially help BitGo to reach new potential and offer a new range of services to their customers.