Cryptocurrency investment firm Galaxy Digital has shifted its acquisition plans for digital asset custodian BitGo.
The acquisition deal was expected to take place in the first quarter according to the original plans of the firm. But the company said it has not managed to finalize the deal, which is scheduled to follow Digital’s domestication in Delaware. However, some changes have been made to the deal, according to the company’s Chief Executive Officer, Mike Novogratz.
“We’ve adjusted the deal some, for progress that BitGo has made,” he stated, stating that BitGo has added about 150 staff members since the acquisition deal was initially made.
Galaxy To Pay $100 Million Fee If Deal Crosses 2022
Novogratz said the commitment to integrate with BitGo is still high, and both firms will continue to work on the integration project.
The deal will be subject to a review process by the United States Securities and Exchange Commission (SEC), according to the firm. The statement also reads that Galaxy will pay a significant fee of $100 million if it fails to complete the deal before the end of 2022. The earlier arrangement for the acquisition was for Galaxy Digital to pay $1.2 billion or 33.8 million in newly issued Galaxy shares. There is also an extra payment of $265 million in cash to settle the deal.
However, the new acquisition terms now include the issue of 44.8 million Galaxy shares plus an additional $265 million in cash. This represents an average transaction value of $1,158 million according to Galaxy’s closing price as of March 30, 2022.
Galaxy’s Shares Have Dropped Since The Deal Was First Announced
After the acquisition, Galaxy will go public in the U.S. The firm has already listed on the Toronto TSX Venture Exchange in 2018, its first-ever listing.
Galaxy’s shares have dropped significantly since the firm announced the acquisition deal of BitGo. It fell from around $30 to below $12 in January this year. However, it has picked slightly to $17 as of press time.
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