Bitcoin mining firm Riot Blockchain to acquire rival Whinstone for $651 million

Nasdaq-listed bitcoin mining firm Riot Blockchain is set to acquire rival Whinstone for $651 million.

Announcing the news on Thursday, Riot said it has signed a definitive agreement with bitcoin mining hosting facility Whinstone for the deal, a mix of cash and stock.

Riot will pay Whinstone owner Northern Data $80 million in cash and the remainder in shares, around a 12% stake.

The transaction is expected to close in the second quarter of 2021, subject to regulatory approvals and other customary closing conditions.

“After the consummation of this transaction, we will have created a very clear path for the Company’s future growth," said Riot CEO Jason Les. "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."

Riot said the acquisition would diversify its revenues and create "significant" financial and operational synergies.

Whinstone currently has a capacity of 300 MW (megawatts), and Riot said it can be "rapidly" expanded by an additional 450 MW, creating a "clear and significantly de-risked" path for its growth.

Riot aims to be a leader in the bitcoin mining and hosting business. Indeed, just yesterday, the firm announced it has ordered 42,000 bitcoin miners worth $138.5 million that will ship through October 2022. When fully deployed, these miners will increase Riot's computing power to an estimated 7.7 million tera hashes per second (TH/s), or about 4.6% of the network's current total.

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Yogita is a senior reporter at The Block and covers all things crypto. Before joining The Block, Yogita worked for CoinDesk and The Economic Times. She can be reached at [email protected] Follow her on Twitter @Yogita_Khatri5.