Galaxy Digital Tweaks Purchase Terms for Crypto Custodian BitGo, Awaits SEC Action

UTC by Bhushan Akolkar · 2 min read
Galaxy Digital Tweaks Purchase Terms for Crypto Custodian BitGo, Awaits SEC Action
Photo: RISE / Flickr

Galaxy Digital has renegotiated the terms of contracts for the BitGo acquisition as the deal will go through following the SEC approval later this year.

On Thursday, March 31, crypto merchants bank Galaxy Digital detailed a few changes to the terms of its deal to buy crypto custodian BitGo. The company had first announced the acquisition in a $1.2 billion deal last year in May 2021.

Galaxy Digital and BitGo

The latest news comes as Galaxy Digital is awaiting approval from the US Securities and Exchange Commission (SEC) to reorganize the Delaware-based company and further list its shares on the Nasdaq exchange.

As per the initial plan of the purchase, Galaxy Digital was to pay $265 million in cash. The rest would settle in 33.8 million newly issued shares of Galaxy Digital. As per the agreement, BitGo shareholders would get a 10% stake in Galaxy Digital.

However, the two parties have now renegotiated the terms of the agreement. As per the new terms, BitGo shareholders will receive 44.8 million newly issued Galaxy shares, 33% more than the previous terms. This means that BitGo shareholders will get 12% of the holding in Galaxy Digital against the previous 10%.

Speaking on this development during Galaxy Digital’s earnings call, CEO Mike Novogratz said:

“We adjusted the deal some, for progress that BitGo has made. They’ve hired close to 150 people or more than 150 people since we originally signed. And so, it’s a bigger and better company. And we’ll continue to work on integration side-by-side until we close the deal.”

Galaxy Digital Stock Tanks 14%

Soon after the announcement on Thursday, the Galaxy Digital (TSE: GLXY) stock listed on the Toronto stock exchange tanked a staggering 14.18%. The stock ended trading at $21.30 on the closing basis on Thursday.

A source familiar with the matter said that the completion of the deal has been tied to the prospective plans of going public on the Nasdaq exchange. But the purchase will close soon after the US SEC approves Galaxy’s plans to register as a Delaware-based company. The company expects it to happen by the end of this year. During Thursday’s earnings call, Galaxy Digital said:

“As previously announced, the Company intends to complete its proposed reorganization and domestication to become a Delaware-based company, and subsequently list on the Nasdaq, upon completion of ongoing SEC review and subject to stock exchange approval of such listing”.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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