By George Ward
Riot Platform Purchases Kentucky-based Mining Firm
Riot Platforms, a major player in the American Bitcoin mining industry, has acquired Kentucky-based Block Mining in a deal valued at $92.5 million. This move will enhance Riot’s operational capabilities and expand its geographical footprint within the United States.
Riot Platforms will pay $18.5 million in cash, sourced directly from its balance sheet, alongside $74 million worth of Riot’s common stock. Additionally, Block Mining could receive an extra $32.5 million, contingent on its performance up until 2025.
The acquisition will add one exahash per second to Riot’s self-mining hashrate. With this deal, Riot also gains access to new energy markets outside its primary operational zone in Texas.
Block Mining currently operates two sites in Kentucky, with a combined capacity of 60 megawatts (MW). Riot still has plans to expand this capacity to 110 MW by the end of 2024.
Furthermore, Block Mining has a greenfield expansion opportunity adjacent to an existing substation in Kentucky, which presents an additional 60 MW potential, expandable to 150 MW.
Benefits of the Acquisition
Riot CEO Jason Les remarked that this acquisition allows Riot to diversify its operations across the nation. Expanding into Kentucky broadens Riot’s operational reach and accelerates its growth towards achieving the targeted 100 exahashes per second (EH/s).
Michael Stoltzner, co-founder and CEO of Block Mining, added that the acquisition presents an opportunity for Riot to enter new energy markets in Kentucky and scale its operations, benefiting from the cost-effective expansion opportunities in the state.
Mining More BTCs
In June, Riot Platforms experienced a 50% surge in its deployed hashrate, allowing the firm to mine 255 Bitcoins. This growth was partly driven by the completion of hardware installations at Riot’s Corsicana, Texas facility, and the utilization of additional capacity at its Rockdale site, also in Texas.
Meanwhile, Riot is currently involved in a legal dispute with former joint venture partners through its subsidiary Whinstone US regarding its Bitcoin mining operations in the United States. The conflict involves allegations of fraud and conspiracy, with Riot’s subsidiary seeking over $1 million in damages.
Tribunal Halts Bitfarms’ Poison Pill Strategy
Meanwhile, the Ontario Capital Markets Tribunal has halted Bitfarms’ poison pill strategy aimed at blocking a takeover by rival mining firm Riot Platforms. The decision is a significant win for Riot Platforms in its bid to acquire Bitfarms.
Riot Platforms revealed that the Ontario Capital Markets Tribunal issued a cease trade order that effectively shut down the company’s poison pill plan. Bitfarms implemented this strategy, formally known as the “rights plan,” to prevent Riot Platforms from proceeding with a $950 million buyout offer, which Bitfarms argued undervalued the company significantly.
A poison pill strategy is a common defense mechanism companies use to prevent hostile takeovers. It allows existing shareholders to purchase additional shares at a heavily discounted rate, diluting the value of shares held by the potential acquirer.
Bitfarms’ Leadership Change Hurdle
Bitfarms had adopted this strategy to counter Riot Platforms’ takeover attempt, allowing it to issue new shares if any entity acquired more than 15% of the company’s outstanding shares before September 10. Bitfarms, which operates twelve Bitcoin mining facilities across the United States, Argentina, Paraguay, and Canada, has undergone significant leadership changes.
Following a lawsuit filed against Bitfarms, former CEO Geoffrey Morphy resigned in May. Since then, Nicolas Bonta has been leading the company as interim president and CEO while a search for a long-term successor is underway.