Riot Platforms Acquires Block Mining to Boost Capacity to 2 Gigawatts
Joerg Hiller Jul 24, 2024 07:39
Riot Platforms, Inc. has acquired Block Mining, Inc., significantly expanding its operational and power capacity in the Bitcoin mining sector.
Riot Platforms, Inc. (NASDAQ: RIOT), a leading Bitcoin mining company, has announced the acquisition of Block Mining, Inc., a Kentucky-based Bitcoin miner, for $92.5 million. This strategic move significantly enhances Riot’s operational capacity and geographical footprint.
Expansion of Operational Capacity
The acquisition immediately adds 60 megawatts (MW) of operational capacity to Riot's portfolio, with the potential to expand to 110 MW by the end of the year under existing agreements. Additionally, Block Mining has a pipeline to build over 300 MW in Kentucky. This deal also increases Riot’s self-mining hash rate by 1 EH/s, with a potential to reach up to 16 EH/s by the end of 2025.
Geographical and Market Diversification
By acquiring Block Mining, Riot is expanding its operational footprint into Kentucky, diversifying from its existing operations in Texas. This move allows Riot to tap into new energy markets, including those serviced by the Tennessee Valley Authority (TVA) and Big Rivers Electric Corporation in the Midcontinent Independent System Operator (MISO) region. MISO is known for facilitating one of the world's largest energy markets, offering demand response programs that enable sophisticated power strategies.
Financial Details and Future Prospects
The purchase price of $92.5 million was paid through $18.5 million in cash and $74 million in Riot common stock. An additional consideration of up to $32.5 million can be earned by Block Mining through 2025 based on the execution of additional power purchase agreements. Riot plans to further expand Block Mining’s two sites, targeting 110 MW for self-mining operations by the end of 2024, with potential greenfield expansion opportunities adjacent to existing substations.
Management Insights
Jason Les, CEO of Riot, expressed enthusiasm about the acquisition, stating, “This transaction allows us to diversify our operations nationally and accelerate Block Mining’s expansion in Kentucky. With a combined 60 MW of existing developed capacity, and a pipeline to rapidly scale to over 300 MW, this acquisition expands our operations and further enhances our path towards our growth target of 100 EH/s.”
Michael Stoltzner, CEO and Co-founder of Block Mining, added, “Riot Platforms shares our vision for an energy-efficient Bitcoin miner and a complementary culture that values teamwork and innovation. Together, we are excited to leverage our collective strengths to build Bitcoin-first data centers that will propel us to the forefront of the industry.”
Advisors and Legal Counsel
Stifel acted as the exclusive financial advisor to Riot, with Greenberg Traurig, LLP serving as legal counsel. XMS Capital Partners, LLC was the exclusive financial advisor to Block Mining, with Winston & Strawn LLP serving as legal counsel.
For more information, visit Riot Platforms' website.
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