Galaxy Digital, a financial services company that focuses on crypto assets (virtual currency), has agreed to acquire BitGo in the US for $ 1.2 billion. By acquiring BitGo, which operates a crypto asset custody (management and storage) business, Galaxy will promote comprehensive service development in this area.
According to the agreement, BitGo shareholders will acquire 33.8 million new shares of common stock and $ 265 million in cash issued by Galaxy Digital. Based on the May 4 closing price of Galaxy Digital shares, the deal will be worth $ 1.2 billion.
“The acquisition of BitGo will enable us to provide a one-stop service for businesses and institutional investors,” said Michael Novogratz, founder and CEO of Galaxy Digital.
Active M & A in North America
In the crypto asset industry in North America, as companies and financial institutions continue to enter the market, there is an active movement to reorganize the industry through M & A (mergers and acquisitions). Payment giant PayPal announced in March that it would acquire the crypto asset Custody Curv.
As the market size of crypto assets expands, the needs of custody are expected to increase. BitGo currently has about 400 client companies worldwide, and in Japan, Rakuten Wallet, which operates a crypto asset exchange, and LVC, which is under the umbrella of LINE, are using BitGo’s services.
BitGo has also been in talks with PayPal last year for a merger. In an interview with CoinDesk, PayPal made a $ 750 million acquisition offer (cash) to BitGo at the time, but did not reach an agreement.
After the acquisition, BitGo shareholders will own approximately 10% of the new company’s shares. Mike Belshe, CEO of BitGo, will become Deputy CEO of Galaxy Digital. The acquisition is expected to close in the fourth quarter (October-December).
｜ Editing: Shigeru Sato
｜ Top image: Shutterstock
｜ Original: Galaxy Digital to Buy BitGo for About $ 1.2B in Stock, Cash