Riot Blockchain Inc. announced April 8 that it had signed an agreement to acquire Whinstone US Inc., including all of its assets and operations, for consideration of $80 million cash plus a fixed 11.8 million shares of Riot common stock which is valued at approximately $651 million based on Riot’s last closing price of $48.37 per share, according to a news release from the company.
Whinstone, based in Rockdale, is the owner and operator of North America’s largest Bitcoin hosting facility. With 300 megawatts in developed capacity and a long-term power purchase agreement, it diversifies Riot’s revenues and catapults Riot into a market-leading position in the Bitcoin mining and hosting business, the news release said.
Riot said the Whinstone facility can be expanded by an additional 450 MW and will be foundational in the company’s strategy to become the industry-leading Bitcoin mining platform in the world. Upon the closing of its acquisition later this year, Riot is expected to be the largest publicly traded Bitcoin mining and hosting company in North America, as measured by developed capacity.
“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,” said Jason Les, CEO of Riot. “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. 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.”
Led by Chad Harris, the Whinstone team has become an industry-leading developer and operator of Bitcoin hosting facilities over the past two years, as Bitcoin mining has reached institutional scale.
The Whinstone team is approximately 100 employees who have built Whinstone’s Texas operations from greenfield to commercialization in less than 12 months. The team, combined with the facility’s expansion capacity, significantly de-risks Riot’s future operational and financial growth, the news release said.
Whinstone is located on a 100-acre site, hosting Bitcoin mining customers in three buildings totaling 190,000 square feet. An additional 60,000-square-foot building is also under development. The site is subject to a longterm lease agreement, with electricity provided via a longterm power supply contract.
“We are excited to be joining Riot, as both Riot and Whinstone share a vision for the future of Bitcoin mining in America,” said Harris, co-founder of Whinstone. “Riot’s strategic vision and resources combined with Whinstone’s infrastructure strength will allow our combined teams to achieve our shared growth plans.”
Northern Data AG, a leading developer and operator of High-Performance-Computing infrastructure solutions, acquired Whinstone in 2020 and has successfully demonstrated its set of capabilities in establishing one of the world’s largest HPC centers.
“With Whinstone, we have built and established one of the largest HPC centers in the world with significant potential and scale to further ramp up capacity,” said Aroosh Thillainathan, CEO of Northern Data.
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