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The sum of the deal between Riot Blockchain and Whinstone totals $651 million, $80 million of this amount will be paid in cash.
One of the largest bitcoin miners in North America Riot Blockchain Inc (NASDAQ: RIOT) has announced it signed an acquisition deal with Whinstone US Inc, a Texas-based data centre developer and subsidiary of Northern Data AG (DB: NB2). As a result of the $651 million agreement, Riot Blockchain intends to become the largest Bitcoin (BTC) mining company in North America.
Riot Blockchain CEO Jason Les commented on the acquisition:
“The acquisition of Whinstone is the most significant achievement in Riot’s growth to-date and positions Riot as an industry leader in Bitcoin mining. After the consummation of this transaction, we will have created a very clear path for the Company’s future growth. Riot will wholly own the largest Bitcoin mining facility in North America, with very low power costs, and one of the most talented development teams in the industry.”
He further explained:
“Whinstone will serve as the foundation of Riot’s Bitcoin mining operations, upon which we will drive our goal of increasing the American footprint in the global Bitcoin mining landscape.”
Speaking of the financial details of the deal, $80 million of $651 million will be paid in cash, with the remainder in the form of 11.8 million shares of Riot common stock. After the deal closes, Northern Data will own a total of 12% of the outstanding common stock of Riot Blockchain.
Why Riot Blockchain Choices Whinstone?
According to the press release, Riot Blockchain believes that Whinstone is a “foundational element” of its long-term strategy to become the leading Bitcoin miner in the US. With a power capacity of 750 MW, Whinstone’s facility is considered to be the largest single facility in North America for Bitcoin mining. Under the leadership of Chad Harris, its team consists of 100 employees. At present, it is also working on Bitcoin mining operations for three institutional clients who will be able to utilize up to 300 MW of aggregate power capacity by the end of this year.
Whinstone’s facility is located on an 100-acre site. It hosts Bitcoin mining customers in three buildings that total 190,000 square feet. In addition, a 60,000 square foot building is also in progress. The site is subject to a long-term lease agreement, with electricity provided via a long-term power supply contract.
Whinstone combines fixed low-cost power agreements, real-time spot power procurement and income from ancillary power services revenue. It ensures such benefits as low-cost energy and maximum production margins, as well as electricity supply with the flexibility to respond rapidly to supply and demand events in the power market.
As Whinstone itself stated, the deal with Riot will obviously provide the latter with the opportunity to not only utilize its existing operational capacity for mining operations but also to scale capacity. As a result, Riot stands good chances to establish themselves as the leading bitcoin miner in the US.