Riot Platforms, a leading Bitcoin mining company in the U.S. announced the acquisition of Block Mining, a Kentucky-based firm, for $92.5 million.
Business development 101: buy a profitable business
Riot Platforms announced the acquisition deal, which includes $18.5 million in cash from Riot’s reserves and $74 million in Riot common stock.
But next to this, Block Mining may receive up to $32.5 million more, depending on performance metrics through 2025.
This strategic move allows Riot to boost its hashrate in a big way, expand geographically, and access new energy markets beyond the Electric Reliability Council of Texas, the ERCOT region.
Michael Stoltzner, CEO and Co-founder of Block Mining expressed the company’s excitement about the partnership, stating that Riot Platforms shares their visions both for energy-efficient Bitcoin mining and a culture that values teamwork, creativity, and excellence.
He told that he looks forward to leveraging their combined strengths to advance in the industry.
Brighter future ahead for Bitcoin mining
Block Mining operates two sites in Kentucky with a combined capacity of 60 MW, which can be expanded to 155 MW.
Based on the current numbers, 23 MW is used for self-mining, 19 MW is vacant, and 18 MW is contracted.
Of the contracted power, 8 MW will be available for Riot’s use within 60-90 days. Riot plans to expand these sites to 110 MW by the end of 2024 and explore a greenfield expansion opportunity in Kentucky for up to 150 MW.
The Block Mining team will continue to manage the Kentucky operations and lead expansion efforts, utilizing their local connections, Riot’s financial resources, and a long-term fixed-price hashrate agreement with MicroBT.
Riot likes to buying mining companies
This acquisition follows Riot’s attempt to buy out another Bitcoin mining company, Bitfarms, for $950 million.
Bitfarms opposed the bid, arguing that it undervalued the company and even implemented a poison pill strategy called the “rights plan” to block the takeover. but shortly after that a Canadian tribunal ended Bitfarms’ strategy, removing a major obstacle to Riot’s acquisition attempt.
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