Riot Platforms Pursues Acquisition of Competitor Bitcoin Miner Bitfarms

Riot Platforms Inc., a number one crypto mining firm, has introduced its intention to amass Bitfarms Ltd., one other important participant within the Bitcoin mining trade.

Riot has already acquired a 9.25% stake in Bitfarms and plans to make a public takeover provide regardless of the corporate’s board’s current rejection.

International Bitcoin Mining Large

Riot has proposed an acquisition worth of $2.30 per share in money and inventory, valuing Bitfarms at roughly $950 million in fairness. Riot’s Government Chairman, Benjamin Yi, emphasised the strategic significance of this merger, stating, “A mixture of Bitfarms and Riot would create the premier and largest publicly listed Bitcoin miner globally, with geographically diversified operations well-positioned for long-term development.”

In line with Riot, the proposed deal will create the world’s largest Bitcoin miner, with a mixed energy capability of 1 gigawatt (GW) and a mining capability of 19.6 exahashes per second (EH/s). By the top of the 12 months, the capability is projected to achieve 1.5 GW and 52 EH/s.

This deal would additionally provide strategic and monetary advantages, together with enhanced development potential and higher entry to fairness markets. The brand new entity would function 15 services throughout the US, Canada, Paraguay, and Argentina.

Riot’s sturdy monetary standing, with minimal debt, over $700 million in money, and eight,872 Bitcoin, is a key issue within the proposed acquisition. Riot expects this may assist Bitfarms’ development and provide higher entry to fairness markets.

Riot submitted its provide to Bitfarms’ board on April 22, however the latter turned it down with out partaking in “substantive dialogue.” In line with the phrases, Bitfarms shareholders would maintain roughly 17% of the merged firm.

Riot additionally intends to name for a particular shareholder assembly to debate the appointment of recent unbiased administrators following Bitfarms’ annual assembly on Might 31.

Consolidation Strain Put up-Halving

The proposed acquisition comes at a important time for the Bitcoin mining trade, which is experiencing speedy consolidation following the halving. The occasion, which halves the rewards for mining Bitcoin, poses income challenges for miners and has brought on bigger firms to hunt mergers and acquisitions to reinforce their aggressive edge.

Whereas bigger miners like Riot have thrived post-halving with substantial money reserves, smaller miners wrestle as a result of restricted negotiating energy and capital entry. For instance, Stronghold Digital Mining Inc. is exploring strategic choices, together with a possible sale.

Riot operates North America’s largest Bitcoin mining facility in Texas, with a 700 MW capability and plans for a brand new 1 GW web site. Regardless of powering 200,000 Texas properties, mining operations face dangers from Texas’ excessive climate and rising vitality costs. In the meantime, Bitfarms has been increasing its operations globally, notably in South America, the place electrical energy prices are decrease.