Galaxy Digital postpones BitGo acquisition to later in 2022

Cryptocurrency investment firm Galaxy Digital has failed to complete its acquisition of digital asset custodian BitGo in the first quarter of 2022 as the company had originally planned.

Galaxy Digital has made some changes to the terms of the BitGo acquisition, CEO Mike Novogratz announced in a profit call on Thursday.

“We’ve tweaked the deal a bit because of the progress BitGo has made,” Novogratz said, noting that BitGo has hired about 150 people since the firms originally signed the deal in May of last year.

He added that Galaxy remains committed to “integrating BitGo and becoming an institutional crypto platform” and that the companies will continue to work on integration.

According to an official statement, Galaxy Digital and BitGo Renegotiated the acquisition will take place “immediately after” Galaxy Digital’s domestication as a Delaware company. The domestication will take effect between Q2 and Q4 of 2022 and is subject to a review process with the U.S. Securities and Exchange Commission, the company noted.

In the event that Galaxy does not complete the transaction by the end of 2022, the company will undertake to pay a significant fee, the statement read:

“A $100 million reverse termination fee will be payable by Galaxy Digital to BitGo in certain circumstances if the transaction is not completed by December 31, 2022, subject to specific provisions.”

As previously reported by Coin-Crypto, Galaxy planned to complete the BitGo acquisition by the end of Q1 2022, with 33.8 million worth of newly issued Galaxy shares, or $1.2 billion, and an additional $265 million. cash was paid to settle the deal.

The new acquisition terms include 44.8 million newly issued shares and $265 million in cash, implying a total transaction value of approximately $1,158 million based on Galaxy Digital’s closing price on March 30.

In conjunction with the BitGo acquisition, Galaxy also planned to head to the US in the first three months of 2022. The company debuted in August 2018 with its first-ever listing on Toronto’s TSX Venture Exchange.

Galaxy shares have fallen significantly since the company announced its acquisition of BitGo, falling from about $30 to below $12 in January 2022. At the time of writing, the stock is trade at $17, down 14% in the past 24 hours, according to data from TradingView.

Galaxy stock price chart for one year in USD. Source: TradingView

Related: Goldman Sachs Completes First OTC Crypto Options Trading With Galaxy

Galaxy also reported net total income was up 55% from approximately $336 million in the third quarter of 2021 to $521 million in the fourth quarter of 2021. $2.45 billion, the company added.

The company is known for having suffered significant losses several times in recent years. Galaxy posted a loss of nearly $176 million in the second quarter of 2021, with Novogratz stating that the company remained “significantly profitable” in the first half of 2021, as net total income was $684 million.

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