Galaxy Digital Holdings Ltd. has signed a deal to acquire BitGo for $1.2 billion in cash and stock.
Galaxy Digital is a financial services and investment manager in the blockchain and cryptocurrency space led by Mike Novogratz. BitGo, a stalwart of the cryptocurrency industry, is an independent digital assets infrastructure provider.
BitGo shareholders will receive 33.8 million shares of Galaxy Digital in addition to $265 million in cash. A large part of the cash payment will be deferred for up to a year from the deal closing, which is anticipated for Q4 2021. Besides this, Galaxy said it will use its balance sheet to fund the cash portion. Regarding the share portion, Galaxy will incrementally issue new shares to BitGo’s shareholders in exchange for net digital assets.
Galaxy Digital will also retain most of BitGo’s employees and management team.
“The acquisition will position Galaxy Digital as a leading global full-service platform for institutions seeking access to the crypto economy, offering an unparalleled breadth of industry-leading products and services at scale,” the company said in a statement.
Founded in 2013, BitGo has primarily developed custody and wallet infrastructure products. Last month, BitGo expanded its cold storage insurance program by $600 million. However, it also offers financial products including prime lending, trading and portfolio management, and tax services.
BitGo has more than $40 billion of assets under management and services more than 150 exchanges and over 400 institutional clients. Additionally, the company processes more than 30 billion monthly transactions while supporting the custody of more than 400 different coins and tokens.