Bakkt, a cryptocurrency exchange and liquidity provider created by Atlanta's Intercontinental Exchange (NYSE: ICE), will go public through a deal with a “blank check” company, according to a Monday announcement.
Bakkt and VPC Impact Acquisition Holdings (NASDAQ: VIH), a special purpose acquisition company, or SPAC, sponsored by Victory Park Capital, will merge to form Bakkt Holdings, Inc.
The deal values the combined company at $2.1 billion, according to the announcement.
Bakkt, an Atlanta-based company founded in 2018 by ICE, which also owns the New York Stock Exchange, allows people to trade, transfer and pay with cryptocurrency with a mission to “bring trust and transparency to digital assets,” according to its website.
The deal, which is set to close in the second quarter of this year, is expected to result in $500 million in cash for the combined company’s balance sheet, $207 million contributed by the VPC Impact Acquisition Holdings trust account.
Bakkt equity holders and management will own 78% of the new company, VPC Impact Acquisition Holdings shareholders are expected to own 8%, VPC will own 2% and private investors, which inludes ICE, will own 12%, according to the announcement.
The merger comes at a time when cryptocurrency has dominated technology news as Bitcoin reached market highs of more than $40,000 during the second week of the year. But in two days, the value decreased to about $30,000, leading experts to speculate that the cryptocurrency could collapse, according to Bloomberg.
But cryptocurrency has piqued the interest of institutional investors, and Atlanta could become a hub for that market, with Bakkt and fellow Atlanta cryptocurrency payments company BitPay leading the charge.
The merger announcement also comes on the heels of former Bakkt CEO Kelly Loeffler losing her U.S. Senate seat to Raphael Warnock during the Georgia runoff.
David Clifton now leads the company as as interim CEO after replacing Mike Blandina, who served as CEO for four months after Loeffler left at the end of 2019.
