Galaxy Digital has agreed to acquire BitGo, a digital assets infrastructure provider, as the firm led by Mike Novogratz positions itself as a full-service platform for institutions seeking access to the crypto economy.
Mike Novogratz, CEO and Founder of Galaxy Digital, said: “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. 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 are excited to welcome Mike Belshe and the talented BitGo team to Galaxy Digital.”
Mike Belshe, CEO and Founder at BitGo, commented: “Joining Galaxy Digital represents an exciting new chapter for our business, as our current clients gain access to a wide set of financial solutions. 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.”
The regulated custodian for digital assets was founded in 2013 to pioneer custody and wallet infrastructure products, financial products including prime lending, trading, and portfolio management, as well as tax solutions that mitigate risk and optimize capital efficiency.
BitGo has now over $40 billion of assets under custody, serving over 150 exchanges and over 400 institutional clients, and processes over 30 billion monthly transactions, supports the custody of more than 400 coins and tokens.
The acquisition of BitGo will introduce multiple new business lines to Galaxy Digital, including a regulated client custody solution from BitGo Trust, companies in South Dakota, New York, Switzerland, and Germany. BitGo’s recurring revenue is significantly less correlated with digital asset prices.
The merger will consist of 33.8 million of newly issued shares of Galaxy Digital common stock and $265 million in cash, implying an aggregate transaction value of approximately $1.2 billion based on Galaxy Digital’s closing share price on May 4, 2021.
Upon closing Mike Belshe will join as Deputy CEO of Galaxy Digital and will become a member of the company’s Board of Directors. The acquisition is expected to close in the fourth quarter of 2021, subject to approval by Galaxy Digital’s shareholders and regulatory approvals.
Mike Novogratz’ Galaxy Digital was already an existing investor in BitGo. The former fund manager at Fortress Group first invested next to Goldman Sachs in a funding round that raised a total amount of $57.5 million that also included capital from Valor Equity Partners, Craft Ventures, DRW, and Redpoint Ventures.