Galaxy Digital postpones BitGo takeover

TL; DR Breakdown

• Galaxy Digital delays BitGo acquisition
• Novogratz announced the update at an earnings call
• Galaxy Digital updates acquisition details

Galaxy Digital, an investment-focused firm in the crypto sector, has announced that it is delaying plans to takeover BitGo. The acquisition of the crypto exchange was supposed to have been finalized in the first quarter of 2022. However, the updated announcement came at an earnings call on Thursday where the company’s executive, Mike Novogratz, named some key details in the takeover.

Novogratz announced the update at an earnings call

According to Novogratz, the takeover terms have been updated with some key changes already made to the initial terms. In his statement, he mentioned that the deal was amended due to some specific changes at BitGo recently. Novogratz said that the company has employed about 100 more staff after signing the acquisition papers with Galaxy Digital in May 2021.

He also said that the company was still focused on easing itself into the BitGo platform to become an exchange that caters to larger institutional-based clients. Another update also said that the integration would occur after both firms agreed on a renegotiation. This was due to Galaxy Digital going on to be domesticated in Delaware. Although the domestication will only be effective after the SEC signs off, it should be in place either in the second or fourth quarter of this year.

Galaxy Digital updates acquisition details

If Galaxy Digital fails to fulfill its end of the bargain by the end of this year, the investment firm will pay a fine. According to the details, BitGo will seek compensation valued at $100 million should Galaxy Digital fail to finish up the acquisition by December 31. As mentioned earlier, the acquisition was set to be completed by the first quarter of this year. As part of the acquisition, Digital Galaxy would part with 33.8 million Galaxy shares.

The firm could also choose to pay $1.2 billion in flat fees and a further $265 million balance later. With the newly signed updated terms, BitGo will receive 44.8 million Galaxy shares and the same balance at a later date. Asides from the acquisition, Galaxy Digital is also flirting with plans to go public in the US. Galaxy has witnessed a conflicted response to the acquisition as its stock had seen a massive decline to trade at $12 from a figure around $30 that it previously traded. Although Galaxy Digital has been at a loss in the last few months, the top executives in the company are saying that this first quarter was a success for the company.