By
Bena Ilyas
April 25th, 2024
Rhodium will fulfil its earlier plan for a public listing after agreeing to a merger with SilverSun Technologies.
Bitcoin miner Rhodium Enterprises is merging with US-based software company SilverSun Technologies Inc to go public. The merger would bring Rhodium, one of America’s largest Bitcoin (BTC) miners, to US public markets.
According to a company press release, the merger agreement would give SilverSun shareholders a cash dividend of at least $1.50 per share, totaling about $8.5 million. Also, the company’s shareholders will receive one share of stock in a newly formed subsidiary housing SilverSun’s legacy businesses. The investment bank, B. Riley, will act as a financial advisor to Rhodium. Furthermore, the press release indicates that the merger should finalize by the end of this year.
The press release states that all company operations will largely remain unchanged. For example, the SilverSun CEO will continue in his position after the business consummation. However, SilverSun’s common stock shares still held by the company’s current shareholders will represent a total of about 3.2% of its pro forma common equity ownership.
Speaking on the business merger, Rhodium Chairman and CEO Chase Blackmon said:
“We believe this strategic transaction will unlock long-term accretive value for Rhodium’s shareholders. We believe access to US capital markets is paramount to sustainable, long-term success in our capital-intensive industry.”
Rhodium Abandoned an Initial Public Offering Plan Before SilverSun Merger
In January, Rhodium announced plans for an Initial Public Offering (IPO) worth between $1.5 billion to $1.7 billion. The filing from the Securities and Exchange Commission (SEC) revealed that Rhodium planned to offer 7.69 million shares for $12 – $14 each.
Upon completing the IPO, Rhodium projected it would have about 56.8 million Class A shares and about 67.5 million Class B shares. Ultimately, this projection would give the company a market valuation between $1.49 billion and $1.74 billion. Rhodium planned to trade on Nasdaq under the “RHDM” ticker. However, according to a familiar source, the company suspended its intentions a week after the announcement due to market conditions.
Rhodium planned to use part of the proceeds to construct new sites in more locations. The miner would have invested part of the gains into general corporate purposes like purchasing new mining machines.
Bitcoin Mining Firms Suffering from Harsh Macroeconomic Conditions
The massive plunge in BTC prices has caused miners to struggle in recent markets. Also, the bear market is seriously discouraging investors from committing their capital. Last week, Compute North, a crypto mining data center, filed for bankruptcy in a Federal court in Texas. The company filed for Chapter 11 bankruptcy seeking to stabilize and restructure its operations.
Compute North currently has between $100 million and $500 million worth of assets and owes 200 creditors about $500 million. According to the bankruptcy petition, the company stated that no funds would be left to pay unsecured creditors after paying administrative expenses.
According to reports, crypto billionaire Jihan Wu is setting up a $250 million funding targeted at purchasing assets at a discount from distressed Bitcoin mining firms. The report says Jihan Wu’s Bitdeer Technologies will donate $50 million to the $250 million fund. Wu intends to seek support from other mining firms, family offices, alternate investment funds, and external investors like venture capital firms.