Galaxy Digital, a cryptocurrency investment company, has not been able to complete the acquisition of BitGo digital asset custodian BitGo within the first quarter 2022 as originally planned.
Galaxy Digital made changes to BitGo’s terms of acquisition, Mike Novogratz, CEO of Galaxy Digital, announced during an earnings call on Thursday.
Novogratz stated that the deal was modified to reflect BitGo’s progress. He also noted that BitGo had hired approximately 150 people since May last year, when the companies signed the original deal.
He said that Galaxy is committed to “integrating BitGo and becoming a institutional crypto platform”, and that the companies will continue to work together on integration.
Officially, Galaxy Digital and BitGo have agreed to re-negotiate the acquisition “immediately after” Galaxy Digital’s domestication as a Delaware corporation. The domestication of Galaxy Digital will take effect in Q2 and Q4 2022, and is subject to review by the United States Securities and Exchange Commission.
The statement states that if Galaxy does not complete the transaction by 2022, the firm will pay a significant fee.
Galaxy Digital will pay BitGo a $100 million reverse termination fee if the transaction is not completed by December 31, 2022. Please refer to specific provisions.
Cointelegraph reported that Galaxy planned to close BitGo’s acquisition by Q1 2022. The deal would be paid in 33.8 million Galaxy shares or $1.2 billion plus $265 million cash.
Based on Galaxy Digital’s closing prices on March 30, the new acquisition terms include 44.8 millions of newly issued shares and $265,000,000 in cash. This translates to an approximate transaction value of $1,158 Million.
Galaxy planned to become public in the U.S. during the first three months in 2022 in conjunction with BitGo’s acquisition. In August 2018, the company was first to list on Toronto’s TSX Venture Exchange.
Galaxy shares have fallen from $30 to $12 in January 2022, after BitGo was announced. According to TradingView data, the stock trades at $17 as of the writing. This is a 14% decrease over the last 24 hours.
Chart showing the one-year price of Galaxy stock in USD Source: TradingView
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Galaxy also reported that the net comprehensive income of the firm increased 55%, from $336 million in Q3 2021 down to $521 million Q4 2021. The firm also reported that net comprehensive income will be down between $110 million and $130 million, bringing it to $2.45 billion.
In recent years, the company has suffered significant losses multiple times. Galaxy reported a loss of almost $176 million in Q2 2021. Novogratz stated that Galaxy was “significantly profitable” during the first half 2021 with net comprehensive income of $684 million.