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 vital participant within the Bitcoin mining business.

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 latest rejection.

International Bitcoin Mining Big

Riot has proposed an acquisition value 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 mix 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 response to 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 tip 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 amenities throughout the US, Canada, Paraguay, and Argentina.

Riot’s robust 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 can help 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 participating in “substantive dialogue.” In response to 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 latest unbiased administrators following Bitfarms’ annual assembly on Could 31.

Consolidation Strain Put up-Halving

The proposed acquisition comes at a essential time for the Bitcoin mining business, which is experiencing fast consolidation following the halving. The occasion, which halves the rewards for mining Bitcoin, poses income challenges for miners and has precipitated bigger corporations 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 battle attributable to 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 website. Regardless of powering 200,000 Texas properties, mining operations face dangers from Texas’ excessive climate and rising power costs. In the meantime, Bitfarms has been increasing its operations globally, notably in South America, the place electrical energy prices are decrease.