Galaxy Digital Tweaks BitGo Purchase Terms as It Awaits SEC Action

CEO Mike Novogratz, the head of crypto merchant bank Galaxy Digital (BRPHF), on Thursday detailed changes to the terms of its deal to buy crypto custody specialist BitGo during Galaxy's earnings call.

The news comes as Galaxy awaits Securities and Exchange Commission (SEC) approval of its plan to reorganize as a Delaware-based company and then list its shares on the Nasdaq exchange.

BitGo shareholders will now receive 44.8 million newly issued Galaxy shares, up from 33.8 million previously, resulting in BitGo holders owning 12% of the combined company versus 10% in the original deal. The $265 million in cash consideration remains the same. The total deal value remains in the $1.2 billion range announced in May 2021 because Galaxy’s share price has slipped since then.

Read more: Galaxy Digital to Buy BitGo for About $1.2B in Stock, Cash

The purchase will close immediately after the SEC approves Galaxy’s plan to domesticate as a Delaware corporation, which the company expects will happen at some point this year. Galaxy also reiterated its plans to list on the Nasdaq once the SEC review is complete.

Speaking on the company earnings call Thursday morning, CEO Mike Novogratz said Galaxy tweaked the deal terms to reflect progress BitGo has made, including hiring over 150 people since the original agreement in May. “It's a bigger and better company,” and Galaxy will continue to work on integration with BitGo, he said.

As for the SEC, Novogratz said Galaxy is still in the comment period with the agency. “We're going to hope for the best and we're going to continue to engage with the SEC,” he said.

Turning to operations, Galaxy posted $521.3 million in net comprehensive income in Q4, up from $335.6 million in the prior-year period. The company cited strong contributions from its trading and principal investment business.