Mike Novogratz’s Galaxy Digital strikes the first $1 billion deal in the crypto sector.

Galaxy Digital Holdings Ltd (TSE: GLXY), founded by Michael Novogratz (pictured above) has inked a deal to acquire BitGo Inc for $1.2 billion in cash and stock. While Galaxy is a diversified financial services and investment management company in the digital asset, cryptocurrency, and blockchain technology sectors, Bitgo is a leading provider of infrastructural services for digital assets. (CISION Newswire Canada)

Galaxy Digital will pay $265 million in cash and $33.8 million shares of its common stock. Currently, Galaxy trades at a market cap of C$3.22 billion.

BitGo shareholders will hold about 10% of the combined company.

It had been rumored previously that PayPal (NASDAQ: PYPL) was keen to acquire BitGo for $750 million in cash.

Deal benefits

• Galaxy Digital becomes a leading global full-service platform for institutions seeking access to the crypto economy through the addition of multiple new lines of business
• BitGo brings $40 billion in custody assets, including more than 400 coins and tokens
• BitGo has a client base of over 150 exchanges and 400 institutional clients
• Bitgo has a solid digital insurance business covering digital assets
• BitGo’s product suite is complementary to Galaxy Digital’s existing offerings across asset management, trading, investment banking, and mining
• Business diversification allowing for a higher component of recurring revenue that would be less dependent on the prices of digital assets
• Synergy benefits

“The acquisition of BitGo establishes Galaxy Digital as a one-stop-shop for institutions and significantly accelerates our mission to institutionalize digital asset ecosystems and blockchain technology,” said Mike Novogratz, CEO and Founder of Galaxy Digital in a statement. “The power of the technology, solutions, and people we will have as a result of this acquisition will unlock unique value for our clients and drive long-term growth for our combined business.”

“We will now be in a position to offer our best-in-class digital asset infrastructure capabilities to significantly more corporate, institutional, and high net worth investor clients,” said BitGo CEO and Founder, Mike Belshe.

The deal is subject to the completion of a “domestication process” that will prime Galaxy for a potential listing in the U.S., and likely to close in the fourth quarter.

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