CryptoGlobal Corp. (TSX-V: CPTO) has entered into an agreement to acquire Blockchain Dynamics Inc. in an all stock transaction valued at $28 million.
CryptoGlobal will issue 20,241,720 common shares with deemed value at $1.40 per share in exchange for all of the outstanding common shares of Blockchain Dynamics.
Founded in 2016, Halifax, Nova Scotia based Blockchain Dynamics closed a private round of financing in January 2018. Blockchain Dynamics also brings exclusive custodial service arrangements, $1.75 million in cash and $2 million in cryptocurrency holdings to CryptoGlobal.
Blockchain Dynamics is a full service platform offering security, custodial services, trading, and staking across a diversified base of crypto currencies. Blockchain Dynamics is led by Chris McGarrigle, an encryption and cyber security specialist who has a 20 year track-record working with Europe’s biggest banks – as well as with clients in the energy and defence sectors. Blockchain Dynamics offers enterprise-grade cold storage and crypto security solutions – and operates a specialized crypto trading desk that currently serves global institutional investors from Asia, South America and the Middle East.
“We’ve been assessing Blockchain Dynamics for months, continue to be impressed by what Chris and his team have accomplished – and believe they are at the forefront of crypto security, storage and trading,” says CryptoGlobal CEO Rob Segal. “It’s the perfect complement to our recent agreement to acquire BitCity, which will secure the 100 MW of long-term power and facilities CryptoGlobal needs to deliver a growing suite of self-mining and hosting revenue.” According to Segal, the Blockchain Dynamics acquisition will allow CryptoGlobal to securely store and trade its own crypto holdings and provide custodial services for institutional investors, exchanges and token holders.
“This strategic acquisition strengthens the company’s vision to build a leading Canadian FinTech company that includes custodial, proprietary trading, exchange, insights and content – underpinned by a diversified cryptocurrency mining operation,” says CryptoGlobal President James Millership.
“This transaction feeds and accelerates both companies’ complementary business streams and is expected to contribute to the exponential growth of Blockchain Dynamics’ crypto trading desk by providing the capital and connections to offer crypto liquidation and flexible, experienced security services to the fast-growing trading and exchange space,” says Blockchain Dynamics CEO Chris McGarrigle.
CryptoGlobal’s legal advisor is Cassels Brock & Blackwell LLP. Blockchain Dynamics’ financial advisor is Canaccord Genuity and its legal advisor is Wildeboer Dellelce LLP.
CryptoGlobal also announced the entering into an agreement with a strategic investor for a $15 million secured credit facility to be drawn in tranches of $5 million each subject to CryptoGlobal meeting certain due diligence requirements.
The net proceeds will be used to build out CryptoGlobal’s growing mining operations and to accelerate the growth of Blockchain Dynamics Inc.
CryptoGlobal has terminated its previously announced brokered private placement offering of special warrants for gross proceeds of up to $10 million.