Rewind to 2018, and the launch of Bakkt was one of the most anticipated developments to occur in the digital asset sector.  Much of this was due to the fact that the majority owner of Bakkt is none other than Intercontinental Exchange (ICE).  This was particularly notable, as ICE is a Fortune 500 company which operates 10+ exchanges – including platforms like the New York Stock Exchange (NYSE).  While the fanfare leading up to its launch may have been disproportionate to its performance since, looking back, Bakkt has still managed to survive and grow through multiple bear markets now.  The most recent example of this was just put on display as it was announced that Bakkt would soon be acquiring Apex Crypto.

Details of the Deal

The reasoning behind this deal seems obvious for Bakkt – achieve profitability.  The company notes that with this acquisition, it expects for the following benefits.

• Expansion of existing client base
• Quicker speed-to-market for new services (staking, NFTs, etc.)
• New sales opportunities to a ‘crypto-savvy’ audience

Bakkt describes Apex Crypto as a ‘turnkey platform for integrated crypto trading’ that currently boasts over 220 clients.

In order to make this acquisition work, Bakkt could end up paying as much as $200M.  There are various caveats however, described below by Bakkt.

“Under the terms of the agreement, Bakkt will acquire Apex Crypto for a maximum purchase price of $200 million. Bakkt will initially pay $55 million in cash at the closing of the deal, and up to $45 million in Bakkt stock depending on the achievement of financial targets by the acquired business in the fourth quarter of 2022; up to an additional $100 million in Bakkt stock and seller notes may be paid depending on the achievement of financial targets by the acquired business through 2025.”

As it stands, the deal is expected to be finalized within the first few months of 2023.

Commentary

Upon announcing the deal, representatives from each Bakkt and Apex Crypto took the time to comment.

Gavin Michael, CEO of Bakkt, states, “We found a unique asset in Apex Crypto, which will expand our crypto client base, provide us with faster speed to market for new crypto capabilities and serve as an additional avenue for continued sales to a crypto-savvy audience through Apex Fintech Solutions…With the addition of this complementary business, we believe we are poised to be a crypto provider of choice for financial institutions, fintechs, merchants or loyalty programs that want to offer seamless crypto experiences to their customers. It’s also expected to enable us to unlock more innovative opportunities that appeal to the next generation of consumers such as crypto rewards and NFTs.”

 

William Capuzzi, CEO of Apex, states, “It’s our purpose at Apex to enable frictionless investing for everyone and Bakkt’s team and platform are a tremendous complement to that…We look forward to working together to continue to provide customers a seamless crypto experience and access to an expanded solution set. This is the beginning of an exciting time of growth and innovation for both of our organizations.”

In Other News

Apparently this is the time of year for company acquisitions, as the above is not the first, second, or even third announcement of its kind from the past couple of months.  Over this time, we have highlighted various of these deals, including the following.

• SeedInvest acquired from Circle by StartEngine,
• HGX acquired by Alta Exchange
• Coinsquare acquires CoinSmart
• Huobi acquired by About Capital Management

With almost a full two months remaining in 2022, and a lingering state of flux affecting the digital asset sector, it seems safe to assume that the above acquisitions will not be the last to occur before the year is out.

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