Analysts say the all-stock deal will transform the Canadian cryptocurrency platform into “a smaller version of Galaxy Digital.”
On July 9, DeFi Technologies (CBOE CA: DEFI) agreed to buy trading desk, Stillman Digital, in a stock swap deal that analysts say will transform the Canadian crypto platform into “a smaller version of Galaxy Digital.” .
The purchase, which valued Stillman at approximately CAD 4.22 million (USD 3.1 million) at the close of trading on July 8, "is a strategic move that not only expands our capabilities in the trading sector, but also diversifies our base of customers and revenue streams," said DeFi Technologies CEO Olivier Roussy Newton. The deal has been agreed upon but has not yet been completed, according to the statement.
"The resulting DeFi platform, which would combine crypto asset management, execution trading, and proprietary trading, would be similar to a smaller version of Galaxy Digital, in our view, as it would include variations of Galaxy's product offerings," Mark Palmer, equity research analyst at The Benchmark Company, told Cointelegraph in an email.
The pending acquisition reflects the need for crypto platforms to seek scale "so they can use size and diversification to better navigate the industry's significant momentum swings and growing competition in many of its sub-verticals," Palmer said. .
Through its investment management subsidiary Valor, DeFi Technologies operates one of Solana's largest SOL€131 exchange-traded products (ETPs), Valor Solana, which is traded in the European Union, along with a number of other ETPs of altcoins.
According to Curtis Schlaufman, vice president of marketing and communications at DeFi Technologies, the investment platform, which manages approximately $600 million in assets, is among a handful of asset managers that can incorporate staking into their publicly traded funds.
Valor's staking investment products include Bitcoin, Ether, and Internet Computer (ICP). Schlaufman said DeFi Technologies also operates several other altcoin ETPs and launched a new line of business earlier this year focused on market-neutral crypto trading strategies.
The acquisition of Stillman "will enhance [DeFi Technologies'] trading capabilities while also producing profits during bear markets," in part due to Stillman's lucrative cryptocurrency onboarding business line, Schlaufman said.
According to the statement, Stillman has facilitated more than $15 billion in trading volume since its inception, around $4 billion of which occurred in the first quarter of 2024.
Mergers and acquisitions (M&A) in the crypto space have been on the rise in 2024, according to advice from M&A Architect Partners, driven largely by consolidation among brokers, exchanges and other financial infrastructure providers.