Axios Pro Exclusive Content

Bitgo gets more shares in renegotiated Galaxy Digital deal

Illustration of a shopping basket full of pixelated coins.

Illustration: Gabriella Turrisi/Axios

In its earnings call Thursday, Galaxy Digital (TSE: GLXY) announced it had renegotiated its $1.2 billion acquisition of Bitgo, a crypto custody company.

Why it matters: The market volatility will continue to affect announced deals that buyers/sellers will want to re-price in the event of significant business/stock market changes.

  • Shares of Galaxy Digital have fallen since the deal was first announced, while Bitgo has grown. Terms of the old deal would have valued Bitgo under $1 billion.

What they said: "We adjusted the deal sum for progress that BitGo has made," Galaxy Digital CEO Mike Novogratz said in the earnings call, noting Bitgo has added some 150 employees. "It's a bigger and better company."

  • The new terms will give Bitgo shareholders roughly 12% of the company rather than 10% as part of the cash-and-st0ck deal first announced in May.

Details: Galaxy had agreed last May to a deal that would have given Bitgo shareholders 33.8 million newly issued shares with a year-end 2021 closing date.

  • The new deal offers Bitgo shareholders 44.8 million in stock.
  • Now, if the deal fails to close by the end of 2022, Galaxy Digital will pay $100 million to Bitgo.

Between the lines: Galaxy Digital is seeking SEC approval to reorganize as a Delaware-based company, and plans to list on the Nasdaq this year. The deal's close is dependent in part on this approval.

Bottom line: Crypto dealmaking is red hot, but it remains an unpaved dirt road from a regulatory, public M&A perspective.

Go deeper