Common cases Agree to acquire Dubai-based Deribit, a major crypto derivatives exchange, for $2.9 billion, for the largest deal in the cryptocurrency industry.
The company said Thursday that the fee includes $700 million in cash and 11 million shares of Coinbase Class A common stock. The deal is expected to end by the end of this year.
Coinbase shares rose nearly 6%.
Greg Tusar, vice president of institutional products, said in a blog post that the acquisition position is an international leader in cryptocurrency derivatives through open interest and option volume, which could allow it to take over large players like Binance. Coinbase operates the largest market for buying and selling cryptocurrencies in the U.S., but has a small share of the global cryptocurrency market, which has largely been financed.
Last year, Deribit promoted more than $1 trillion in transaction volume, with the platform having about $30 billion in current open interest.
"We are excited to unite with Coinbase to power a new era of global crypto derivatives," Deribit CEO Luuk Strijers said in a statement. "As a leading crypto selection platform, we have built a strong profitable business, and this acquisition will accelerate us to provide traders with more opportunities, futures, futures, perpetuality and options - all under a trusted brand - with Coinbase. Together with Coinbase, we will shape the future of the global crypto derivatives market."
Tusar also noted that Deribit has a "consistent record" and the company believes it believes it will become a positive adjustment to the combined entity EBITDA.
"One of the things we love most about this deal is that it is not only a game-changing opportunity for our international expansion plans, but also immediately diversify our revenues and improve profitability."
The deal took place as the cryptocurrency industry rode from the first ever pro-Clateto White House regulation. Support from the industry has intensified crypto M&A activity in recent weeks. In March, cryptocurrency exchange Kraken agreed to acquire Ninjatrader for $1.5 billion, and last month Ripple agreed to buy Prime Broker Hidden Road.
By using this deal as a cash deal, Coinbase should still have bandwidth for other acquisitions if there is a chance. As of December 31, Coinbase had $8.5 billion in cash on its balance sheet.