Riot Platforms, a prominent American Bitcoin mining company, recently made a significant acquisition by purchasing Block Mining, a Kentucky-based firm, for a total of $92.5 million. The transaction involved $18.5 million in cash from Riot’s reserves and $74 million in Riot common stock. There is also a possibility for Block Mining to receive an additional $32.5 million based on performance metrics up to 2025.
This acquisition has allowed Riot to increase its hash rate, expand its geographical reach, and access new energy markets beyond the Electric Reliability Council of Texas (ERCOT) region. Michael Stoltzner, the CEO and Co-founder of Block Mining, expressed his enthusiasm for the partnership with Riot, highlighting their shared vision for energy-efficient Bitcoin mining and a culture that values teamwork and excellence.
Block Mining currently operates two sites in Kentucky with a total capacity of 60 MW, which can be expanded to 155 MW. While 23 MW is used for self-mining, 19 MW is currently vacant, and 18 MW is under contract. Riot plans to increase the capacity of these sites to 110 MW by the end of 2024, with a potential expansion opportunity for up to 150 MW in Kentucky.
Additionally, the team at Block Mining will continue to manage the existing operations in Kentucky and lead the expansion efforts, leveraging their local connections, Riot’s financial resources, and a fixed-price hash rate agreement with MicroBT.
This acquisition by Riot follows a failed attempt to acquire the rival Bitcoin miner Bitfarms. Bitfarms had been resisting Riot’s $950 million bid for the past two months, using a “rights plan” strategy to thwart the takeover. However, on July 24, a Canadian tribunal ruled in favor of Riot, removing a major obstacle to the acquisition.
In conclusion, Riot Platforms’ acquisition of Block Mining marks a significant milestone for the company, enabling it to enhance its mining capabilities, expand its operations, and solidify its position in the competitive Bitcoin mining industry. With this strategic move, Riot is poised to achieve further growth and success in the evolving cryptocurrency market.