Holland & Knight Advises Silvergate Capital on $182 Million Purchase of Assets Related to Diem Cryptocurrency Payment Network
WASHINGTON (February 3, 2022) – Holland & Knight advised Silvergate Capital Corporation (NYSE: SI) on the acquisition of intellectual property and other technology assets related to running a blockchain-based payment network from the Diem Group. The deal, which was announced on Jan. 31, 2022, further enhances Silvergate's existing stablecoin infrastructure and solidifies its position as a leader in the digital currency industry.
Under the terms of the asset purchase agreement, Silvergate has issued 1,221,217 shares of class A common stock to Diem and paid $50 million in cash. Based on the closing price of SI on Jan. 31, the aggregate value of the consideration was $182 million.
The assets acquired by Silvergate include development, deployment and operations infrastructure and tools for running a blockchain-based payment network designed to facilitate payments for commerce and cross-border remittances. The network has been operating in a pre-launch phase, was built by a world-class group of engineers over a two-year development cycle with architectural quality evidenced by its security, reliability and scalability. Included in the acquisition are proprietary software elements critical to running a regulatory-compliant stablecoin network.
Through its close partnership with Diem, Silvergate has gained deep familiarity with the network and developed strong appreciation for its potential to enable a Silvergate-issued stablecoin that will power the future of global payments.
Silvergate Bank, a subsidiary of Silvergate, is a California chartered and Federal Reserve member bank with nearly a decade of experience building solutions for the digital currency industry. Its real-time payments platform, the Silvergate Exchange Network (SEN), enables its customers to move money between their accounts and the accounts of other Silvergate customers 24 hours a day, 7 days a week. By integrating the assets acquired from Diem with the SEN, Silvergate is one step closer to launching a next-generation global payment system that is faster, easier to use and more cost-effective than existing solutions.
Holland & Knight Partners Kevin Houlihan, Mark Goldschmidt and William Levay and Associates Amelia Occhino, Mary Ellen Stanley, Ariel Stevenson and Anebi Adoga led the firm's representation of Silvergate in the deal. They were assisted by Partners Dan Barsky, Betsy Burkhard, Josias Dewey, Marc Druckman, Ross Tuminello and Travis Nelson and Associate Allia Howard.
More information about the transaction can be found here.