Galaxy Digital, First Coin and Bradmer Pharmaceuticals Announce Business Combination and Establishment of Blockchain, Digital Asset and Cryptocurrency Platform
TORONTO, ONTARIO–(Marketwired – Jan. 9, 2018) -
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Bradmer Pharmaceuticals Inc. (“Bradmer“) (NEX:BMR.H) is pleased to announce that it has entered into a letter of intent, dated January 9, 2018 (the “Letter of Intent“), with Galaxy Digital LP (“Galaxy Digital” or the “Firm“) and First Coin Capital Corp. (“First Coin“) to form a leading new enterprise in the blockchain, digital asset and cryptocurrency space. The series of transactions contemplated by the Letter of Intent (the “Proposed Transaction“) is intended to result in Galaxy Digital and First Coin combining to form a Galaxy Digital operating partnership that will be managed by the principals of Galaxy Digital. In connection with the Proposed Transaction, Bradmer, which will acquire and hold a minority investment in Galaxy Digital, is expected to change its name to “Galaxy Digital Holdings” and to resume an active public listing on the TSX Venture Exchange (the “TSX-V“).
Based in New York and founded as a subsidiary of Galaxy Group Investments, the personal investing business of Michael Novogratz, Galaxy Digital is undertaking the Transaction in order to raise primary capital towards building a best-in-class, full service, institutional-quality merchant banking business in the cryptocurrency and blockchain space. This corporate development is an important step in the evolution of the Firm’s lifecycle and provides Galaxy Digital with a strong foundation from which to build and expand its platform, network, and brand. Galaxy Digital will include Mr. Novogratz’s portfolio of digital assets.
Going forward, the Firm intends to capitalize on market opportunities made possible by the ongoing evolution of the digital assets space, through four primary business lines: trading, principal investing, asset management, and advisory. Galaxy Digital will leverage its deep ties into bitcoin, ethereum and other protocol communities to drive returns from four core business segments:
- Trading: Galaxy Digital intends to manage positions in cryptocurrency and other liquid digital assets contributed to the business at the outset and to continue to invest and trade in those and related assets. In addition, Galaxy’s in-house, quantitative development team is building and intends to expand its proprietary infrastructure and trading strategies, initially focused on cross-exchange arbitrage opportunities.
- Principal Investments: The contributed assets to the Firm are a diverse portfolio of private equity and venture investments across the blockchain ecosystem and a book of Initial Coin Offerings (“ICOs“) and pre-ICO investments. Galaxy will continue to make selective principal investments across the ecosystem using capital raised from the Transaction, as well as recycling capital from existing investments upon realization.
- Asset Management: Galaxy Digital intends to manage capital on behalf of third-party limited partners in exchange for management fees and performance-based compensation. Near-term plans include developing a passive beta product and a venture-style fund focused on investing in and building a specific blockchain protocol.
- Advisory: The combination of Galaxy Digital and the First Coin team allows the Firm to have a multi-jurisdictional advisory and consulting business spanning the emerging blockchain and cryptocurrency landscapes. The combined team will develop and seek to bridge the gap between technology and markets. The team will support clients with a broad range of services, including market research, solution ideation and white paper writing, architecture design, business and technical requirement documentation, vendor selection and project management.
The Proposed Transaction will be conditional upon satisfactory due diligence of the parties as well as the negotiation and execution of definitive agreements for the completion of the Proposed Transaction in a manner that satisfies the legal, regulatory, tax, commercial and other customary considerations of the parties (the “Definitive Agreements“). The Definitive Agreements will include customary representations and warranties and conditions to closing. Galaxy Digital expects the Proposed Transaction to close in the first quarter of 2018.
As part of the Proposed Transaction, Galaxy Digital and First Coin intend to organize and complete a private placement of subscription receipts (the “Subscription Receipts“) for targeted gross proceeds of C$250 million. The Subscription Receipts are currently anticipated to be issued by Bradmer. Purchasers of the Subscription Receipts will ultimately, as a result of the Proposed Transaction, acquire shares of the renamed and relisted Bradmer, following the satisfaction of certain specified escrow release conditions attached to the Subscription Receipts. The proceeds of the private placement, assuming the satisfaction of the escrow release conditions, will be used by Bradmer to acquire a minority equity interest in a Galaxy Digital operating partnership. Purchasers of the Subscription Receipts, together with existing shareholders of Bradmer, therefore will ultimately hold an indirect interest in Galaxy Digital. The Subscription Receipt financing will be led by GMP Securities L.P., will be priced in the context of the market and is expected to close in February 2018.
If completed, the Proposed Transaction will constitute a reverse take-over of Bradmer by Galaxy Digital and First Coin pursuant to the policies of the TSX-V and the reactivation of the listing of Bradmer, which is currently an NEX-listed issuer. It is anticipated that Bradmer will complete a consolidation of its common shares in advance and as a condition to the completion of the Proposed Transaction and continue out of the Province of Ontario to become a company existing under the laws of the Cayman Islands. In addition, it is anticipated that Bradmer will change its name, as noted above, and appoint a new slate to its board of directors to manage the investment in Galaxy Digital on an ongoing basis.
Following the completion of the Proposed Transaction: (i) the current principals and owners of Galaxy Digital and First Coin will continue to hold direct controlling equity interests in the going-forward Galaxy Digital operating partnership, which will generally be economically equivalent to those held by Bradmer but will be exchangeable, from time to time, into common shares Bradmer, and (ii) Bradmer will be a holding company with its minority equity interest in Galaxy Digital as its only significant asset.
If Definitive Agreements are executed, it is anticipated that a meeting of the shareholders of Bradmer will be called to approve the share consolidation, the name change, continuation, the appointment of the new directors and any other matters related to the Proposed Transaction. Similarly, if Definitive Agreements are executed, it is anticipated that meetings of the shareholders of First Coin will be called to approve the Proposed Transaction.
Following the completion of the Proposed Transaction, the purchasers of Subscription Receipts will hold almost all of the outstanding common shares of the renamed and relisted Bradmer.
The directors and officers of Bradmer following the completion of the Proposed Transaction are still to be determined; however it is anticipated that such board will consist of a majority of independent directors who are also independent of Galaxy Digital and its significant shareholders. Mr. Novogratz is expected to be the initial Chairman of the board of directors of Bradmer. Further, the board will have committees with charters and memberships consistent with TSX-V requirements.
The Proposed Transaction is subject to a number of terms and conditions as set forth in the Letter of Intent, including the approval of the respective shareholders of Bradmer and First Coin, the completion of the private placement of Subscription Receipts and the receipt of all requisite regulatory and stock exchange approvals.
A comprehensive press release with further particulars relating to the Proposed Transaction will follow in accordance with the policies of the TSX-V.
The information contained or referred to in this press release relating to Galaxy or First Coin has been furnished by Galaxy or First Coin, respectively. Neither Bradmer nor any of its respective directors or officers assumes any responsibility for the accuracy or completeness of such information.
Upon closing of the Proposed Transaction, it is anticipated that the following senior officers of Galaxy will be part of the management team for the Galaxy Digital operating business:
Michael Novogratz: Chairman and Chief Executive Officer
Michael E. Novogratz is Chairman and Chief Executive Officer of Galaxy Investment Partners. He was formerly a principal and a member of the board of directors of Fortress Investment Group LLC and Chief Investment Officer of the Fortress Macro Fund. Mr. Novogratz joined Fortress in 2002 after spending more than a decade at Goldman Sachs, where he was elected partner in 1998. Mr. Novogratz received an A.B. degree from Princeton University in Economics and served as a helicopter pilot in the United States Army.
Richard Tavoso: President
Richard Tavoso is the President of Galaxy Digital LP. Mr. Tavoso joined the Firm in 2017. He brings two decades of trading and risk management experience to the Firm after a long and successful career overseeing RBC Capital Markets’ global arbitrage and trading division. Mr. Tavoso received an A.B. degree from Princeton University.
Christopher Ferraro: Head of Principal Investments
Christopher C. Ferraro is the Chief Investment Officer at Galaxy Investment Partners. Mr. Ferraro joined the Firm in 2017. He previously worked on direct lending and special-situations investing at HPS Investment Partners. Prior to this, Mr. Ferraro was employed at BlackRock Kelso Capital Advisors LLC, focused on investing capital for a publicly-traded business development company. Mr. Ferraro received a B.A. in Applied Mathematics and Economics from Yale University.
David Namdar: Head of Business Development
David Namdar is Head of Business Development at Galaxy Investment Partners. Mr. Namdar joined the Firm in 2017 and is a seasoned investor in blockchain technology and the digital asset ecosystem. Mr. Namdar has 10 years of investment management and trading experience with Millennium Partners and UBS Hong Kong. He was also the Co-founder of SolidX Partners. Mr. Namdar received a B.S. degree from USC’s Marshall School of Business.
Stephen Kurz: Head of Investor Relations
Stephen Kurz is Head of Investor Relations at Galaxy Investment Partners. Mr. Kurz joined the Firm in 2017 following a decade of asset management experience at River Birch Capital, Fortress Investment Group, and Lehman Brothers. He previously founded Outer Realm VR, an enterprise-focused immersive software company. Mr. Kurz received a B.A. in Economics from Cornell University.
Sam Englebardt: Head of Strategic Partnerships
Sam Englebardt is Head of Strategic Partnerships at Galaxy Investment Partners. Mr. Englebardt joined the Firm in 2017 and brings extensive media and technology investing experience to the Firm, including blockchain and cryptocurrencies, mixed reality (VR/AR), artificial intelligence and other related technologies. Prior to joining Galaxy Investment Partners, Mr. Englebardt was a partner and managing director at Lambert Media Group and a vice president at Alliance Bernstein. He received a J.D. from Harvard Law School.
Peter Wisniewski: Head Trading
Peter Wisniewski is Head of Trading at Galaxy Digital LP. Mr. Wisniewski joined the Firm in 2017. He was formerly a principal at Del Mar Asset Fund, a multi asset event driven hedge fund, for 10 years. Prior to this, Mr. Wisniewski was employed at Deutsche Bank and Susquehanna International Group. Mr. Wisniewski received a B.S. in Electrical Engineering from the University of Pennsylvania.
Frans Tjallingii: Chief Executive Officer of First Coin
Frans Tjallingii is the current Chief Executive Officer for First Coin. Mr. Tjallingii will have a prominent role in the Galaxy Digital LP Advisory business. He has extensive corporate strategy, turnaround and investment analysis experience and has been involved in start-ups since 2014 and in Blockchain since 2015. Mr. Tjallingii was formerly President of SAAM SMIT Towage Canada until November 2016. Mr. Tjallingii received an MSc. in Marine Biology from the University of Groningen and an MBA from the Rotterdam School of Management.
Kim Pillemer: General Counsel
Kim Pillemer is the General Counsel at Galaxy Investment Partners. Prior to Galaxy Digital, Ms. Pillemer spent 10 years as President of a multi-family office with extensive experience in digital asset investments. Earlier in her career, she was a debt capital markets banker at Lehman Brothers and was in-house counsel for fixed income and special situations at Goldman Sachs. Ms. Pillemer received a B.A. from the University of Pennsylvania and a J.D. from New York University.
Advisors and Counsel
GMP Securities L.P. is acting as financial advisor to Bradmer, First Coin and Galaxy. Sullivan & Cromwell LLP and Blake, Cassels & Graydon LLP are acting as legal advisors to Galaxy, Wildeboer Dellelce LLP is acting as legal advisor to Bradmer, and Borden Ladner Gervais LLP is acting as legal advisor to First Coin.
Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to stock exchange acceptance and completion of due diligence that is satisfactory to all parties. There can be no assurance that Definitive Agreements will be executed or the Proposed Transaction or Subscription Receipt financing will be completed as proposed or at all.
Except as disclosed in the filing statement or information circular to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Bradmer should be considered to be highly speculative.
The TSX-V has in no way passed upon the merits of the Proposed Transaction or the Subscription Receipts and has neither approved nor disapproved the contents of this press release.
NEITHER TSX-V NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX-V) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Certain information in this press release may constitutes forward-looking statements, which can be identified by the use of terms such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue” or “believe” (or the negatives) or other variations. Because of various risks and uncertainties, including those discussed above, actual events or results, including the ultimate business or activities of Galaxy Digital, may differ materially from those reflected or contemplated in such forward-looking statements. As a result, you should not rely on such forward-looking statements. Additional information identifying risks and uncertainties relating to Bradmer is contained in its filings with the Canadian securities regulators, which filings are available at www.sedar.com.
Issuer of Subscription Receipts
Galaxy Digital is not the issuer of the Subscription Receipts. Galaxy Digital is not making, and does not propose to make, any offer or sale of any interests. The Subscription Receipts will be offered, sold and issued by Bradmer or another issuer whose organization, ownership and management will be different from those of Galaxy Digital. Purchasers of Subscription Receipts will hold an indirect interest in Galaxy Digital managed on their behalf by Bradmer or another issuer. Prospective purchasers of Subscription Receipts should be aware of this distinction, which will be described more fully in offering documentation for the Subscription Receipts.
Restrictions on Offering of Subscription Receipts
The Subscription Receipts have not been and will not be registered under the applicable securities laws of the United States, Canada or any other jurisdiction. The Subscription Receipts may not be offered or sold within the United States or into any other jurisdiction where to do so would constitute a violation of applicable laws or regulations of such other jurisdiction or to any national, resident or citizen of such other jurisdiction. The Subscription Receipts may not be offered or sold to or for the account or benefit of U.S. persons as defined in Regulation S (“Regulation S“) under the U.S. Securities Act of 1933, as amended, and the Subscription Receipts are being offered and sold only to non-U.S. persons in Canada and selected other jurisdictions in “offshore transactions” in reliance on Regulation S.
None of the U.S. Securities and Exchange Commission, any U.S. state securities commission or any other governmental body or self-regulatory organization has approved or disapproved of the Subscription Receipts, nor have they passed upon or endorsed the merits of the Subscription Receipts offering. Any representation to the contrary is a criminal offence in the United States.
The issuer of the Subscription Receipts is not, and does not expect to be, registered as an investment company under the U.S. Investment Company Act of 1940, as amended, and purchasers of Subscription Receipts will not be entitled to the benefits of that Act.
Chief Financial Officer
Head of Investor Relations
for media inquiries on behalf of Galaxy Digital
1.212.279.3115; Ext: 242
Chief Executive Officer