Cryptocurrency investment firm Galaxy Digital has failed to close the acquisition of digital asset custodian BitGo in the first quarter of 2022, as the firm initially planned.
Galaxy Digital has made some changes to the terms of its acquisition of BitGo, its CEO, Mike Novogratz, announced on Thursday at an earnings call.
“We have adjusted the deal a bit, due to progress BitGo has done,” Novogratz said, noting that BitGo has hired about 150 people since the companies originally signed the deal in May last year.
He added that Galaxy remains committed to “integrating BitGo and become an institutional cryptocurrency platform”, and that the companies will continue to work on the integration.
According to an official statement, Galaxy Digital and BitGo have renegotiated the acquisition to take place “immediately after” that Galaxy Digital is established c as a Delaware corporation. The settlement will be effective between the second and fourth quarters of 2022 and is subject to a review process with the United States Securities and Exchange Commission, the firm said.
In the event that Galaxy does not complete the transaction before the end of 2022, the company agrees to pay a significant fee, the statement says:
“A reverse termination fee of USD 100 million will be paid by Galaxy Digital to BitGo in certain circumstances if the transaction has not been completed before December 31, 2022 and is subject to specific provisions”.
As we previously told you, Galaxy planned to complete the acquisition of BitGo by the end of the first quarter of 2022, paying $33.8 million in newly issued Galaxy shares, or $1.2 billion, and an additional $265 million in cash to settle the deal.
The new Acquisition conditions include 44.8 million newly issued shares and USD 265 m million in cash, for a total transaction value of approximately USD 1,158 million, based on Galaxy Digital’s closing price on March 30.
In conjunction with the acquisition of BitGo, Galaxy will also was scheduled to go public in the United States in the first three months of 2022. The company previously debuted its first listing on the TSX Venture Exchange in Toronto in August 2018.
Galaxy shares were have plummeted significantly since the company announced the acquisition of BitGo, falling from about $30 to less than $12 in January 2022. At time of writing, shares are trading at $17, down 14% in the last 24 hours, according to TradingView data.
Galaxy also reported that its net comprehensive income increased by 55%, from approximately $336 million in the third quarter of 2021 to $521 million in the fourth quarter of 2021. At the same time, net comprehensive income is expected to be a loss. of between 110 and 130 million dollars, which will be around USD 2,450 million, added the firm.
The company is known for having recorded significant losses on several occasions in recent years. In the second quarter of 2021, Galaxy posted a loss of nearly $176 million, with Novogratz stating that the company remained “significantly profitable” in the first half of 2021, as global net income was $684 million.
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