Cryptocurrency investment company Galaxy Digital was unable to complete its acquisition of digital asset manager BitGo in the first quarter of 2022, as the company originally planned.
Galaxy Digital has made some changes to the terms of its acquisition of BitGo, CEO Mike Novogratz said in an earnings call Thursday.
“We have modified the agreement somewhat to reflect the progress that BitGo has made,” Novogratz said, noting that BitGo has employed about 150 people since the companies signed the agreement last May.
He added that Galaxy remains committed to “integrating BitGo into the enterprise crypto platform” and the companies will continue to work on the integration.
According to the official statement, Galaxy Digital and BitGo renegotiated the terms of the acquisition “immediately” after Galaxy Digital became a Delaware-based company. The company indicated that the taming will take effect between the second and fourth quarters of 2022 and will be reviewed by the US Securities and Exchange Commission.
In the event that Galaxy is unable to complete the transaction by the end of 2022, the company is committed to pay a large fee, the statement said:
“Galaxy Digital will pay a $100 million reverse termination fee to BitGo under certain circumstances if the transaction is not completed by December 31, 2022, subject to certain conditions.”
As Cointelegraph previously reported, Galaxy plans to complete the BitGo acquisition 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 agreement.
The new terms of the acquisition include 44.8 million newly issued shares and $265 million in cash, bringing the total value of the deal to approximately $1,158 million, based on Galaxy Digital’s March 30 closing price.
Regarding the acquisition of BitGo, Galaxy also plans to become a public company in the US in the first three months of 2022. Previously, the company first appeared on the TSX Venture exchange in Toronto in August 2018.
Galaxy shares have plummeted since the company announced its acquisition of BitGo, dropping from $30 to less than $12 in January 2022. At the time of writing, the stock is trading at $17, down 14% from the last 24 hours. , according to TradingView.
Galaxy stock price chart for 1 year in USD. Source: Trading View
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Galaxy also reported that its total profit increased by 55% from approximately $336 million in the third quarter of 2021 to $521 million in the fourth quarter of 2021. Meanwhile, its total net revenue is expected to be a loss of US$110 million. 130 million US dollars, and the company added that the capital of partners is about 2.45 billion dollars.
The company has been known to run into huge shortages several times in recent years. Galaxy posted an estimated loss of $176 million in the second quarter of 2021, and Novogratz said the company remained “significantly profitable” in the first half of 2021 with total net revenue of $684 million.