Galaxy Digital, a cryptocurrency investment business, has changed its purchase intentions for digital asset custodian BitGo.
According to the firm’s original intentions, the acquisition would occur in the first quarter. However, the business stated that it has not been able to consummate the acquisition, which was supposed to follow Digital’s domestication in Delaware. Mike Novogratz, the company’s CEO, indicated that BitGo has gained roughly 150 employees since the purchase agreement was first announced.
Galaxy to make a payment of $100 million?
According to the firm, the transaction will be subject to SEC investigation. The announcement also states that Galaxy would pay a hefty charge of $100 million if the agreement is not completed before the end of 2022. The previous agreement for the acquisition called for Galaxy Digital to pay $1.2 billion, or 33.8 million newly issued Galaxy shares. There is also a cash payment of $265 million to close the sale.
The current acquisition conditions, however, involve the issuance of 44.8 million Galaxy shares as well as an extra $265 million in cash. According to Galaxy’s closing price on March 30, 2022, this indicates an average transaction value of $1,158 million.
Shares of Galaxy dropped
Galaxy will go public in the US following the acquisition. In 2018, the company became the first-ever listing on the Toronto TSX Venture Exchange.
Since Galaxy announced the acquisition of BitGo, the company’s stock has plummeted considerably. In January of this year, it dropped from approximately $30 to around $12. However, as of press time, it had risen marginally to $17.
