Galaxy Digital has announced that it will be purchasing BitGo for $1.2 billion. The news came in on Wednesday, May 5. According to the firm, the purchase of the crypto custodian will enable the organization serve as a global provider of digital asset financial services for institutions.
The deal will be sealed partly by cash and partly by shares in the company. Galaxy Digital will pay a sum of $265 million in cash to BitGo while $33.8 million will be issued as shares to the company.
Once the deal has been sealed, BitGo’s current shareholders will be owners of 10% equity in Galaxy Digital. It is expected that the deal will be concluded towards the end of the year.
Commenting on the acquisition, Mike Novogratz said the new development will help unlock unique value for their clients. He also added that the acquisition will spur the company to grow significantly especially from a long-term perspective. It will expose their clients to a wider range of financial solutions.
Benefits of the Acquisition
One key benefit of the acquisition is the expansion of the customer base for Galaxy Digital. At the moment, BitGo has over 400 global institutions that will be connected upon acquisition. This will definitely help to drive innovation and increase productivity as the company looks to scale to greater heights.
The geographic reach of Galaxy Digital will also be extended via the BitGo connection. The crypto firm has a very strong international presence at the moment that it’s new parent company will be looking to benefit from.
BitGo reportedly has assets worth over $40 billion in its custody at the moment. It also serves more than 150 exchanges. As at December last year, PayPal were close to purchasing the firm. The deal however was unsuccessful as PayPal eventually purchased Curv for an undisclosed sum. This gave room for Galaxy Digital to seal acquisition deal.