Key Points
- Riot Platforms, Inc. has acquired Block Mining, Inc. for $92.5 million, enhancing its operational capacity and growth.
- The acquisition is expected to expand Riot’s operations and increase its hash rate, despite high investment costs.
Riot Platforms, Inc. has recently acquired Kentucky-based Block Mining, Inc. The deal was worth $92.5 million, which includes $18.5 million in cash and $74 million in Riot common stock.
An additional earn-out consideration of up to $32.5 million is contingent on achieving specific milestones.
Riot’s Expansion
Block Mining operates two data centers in Kentucky, adding 1 EH/s to Riot’s portfolio. The data centers are located in Paducah and Calvert City, operating at 35 MW and 7 MW respectively.
Riot aims to significantly expand these capacities to 110 MW by the end of 2024 and 305 MW by the end of 2025. This expansion could potentially increase Riot’s hash rate to 36.3 EH/s by the end of 2024 and 56.6 EH/s by the end of 2025.
Long-term Growth and Diversification
This acquisition aligns with Riot’s long-term goal of reaching 100 EH/s. It also diversifies Riot’s geographic footprint beyond Texas, where all its mining operations were previously located.
Analysts view this as a prudent use of capital, enhancing Riot’s operational efficiency and reducing geographic risk.
Riot expects to spend $345 million in capital expenditures to fully develop BMI’s sites post-acquisition. Despite the substantial investment, Riot’s strong liquidity position, with $639 million in cash and significant Bitcoin holdings, supports this expansion.
Analysts have increased Riot’s 2024 revenue estimate to $344.2 million and adjusted EBITDA estimate to $321.7 million, reflecting confidence in the acquisition’s potential to drive growth and profitability.
