Riot Platforms, the leading company in vertically integrated bitcoin mining, announced the acquisition of Block Mining, a Kentucky-based bitcoin miner for a total of $92.5 million. This transaction marks a significant step in Riot’s expansion strategy and allows it to geographically diversify its operations.
The details of the acquisition
Riot paid the purchase price in cash to the tune of $18.5 million and by issuing 7.24 million new common shares, valuing the acquisition at approximately 1,$54 million per megawatt (MW). Block Mining could earn up to an additional $32.5 million if it succeeds in completing some power purchase contracts in 2024 and 2025.
The acquisition of Block Mining immediately adds 1 EH/s to Riot’s own mining hash rate, with a potential to reach up to 16 EH/s by the end of 2025. Block Mining currently operates two sites in Kentucky with a total capacity of 60 MW, of which 23 MW are dedicated to own extraction, 19 MW are vacant and ready for immediate deployment of miners, and 18 MW are leased to hosting clients.
Synergies and growth prospects
This acquisition allows Riot to geographically diversify its operations and accelerate the expansion of Block Mining in Kentucky. With an existing capacity of 60 MW and a pipeline to quickly grow to more than 300 MW, this transaction expands Riot’s operations and strengthens its trajectory toward its 100 EH/s target.
In addition, the experienced team at Block Mining, which will remain in place, brings its expertise and strong legal relationships. This will allow Riot to leverage its balance sheet and long-term fixed price contract with MicroBT to accelerate the development of cutting-edge Bitcoin data centers.
