- Acquisition adds 60 Megawatts ("MW") of current operational
capacity with the potential to quickly expand to 110 MW this year
under existing agreements, and a pipeline to build to over 300 MW
in Kentucky
- Transaction immediately adds 1 EH/s to Riot's existing
self-mining hash rate with a potential to add up to a total of 16
EH/s by the end of 2025
- Expands Riot's operating footprint into Kentucky with an experienced on-the-ground
management team
CASTLE
ROCK, Colo., July 23,
2024 /PRNewswire/ -- Riot Platforms, Inc. (NASDAQ:
RIOT) ("Riot" or "the Company"), an industry leader in vertically
integrated Bitcoin mining, is pleased to announce that
it has acquired Block Mining, Inc. ("Block Mining"), a Kentucky-based vertically integrated
Bitcoin miner, for total consideration at closing of
$92.5 million. Riot paid the purchase
price through $18.5 million of cash
from its balance sheet plus $74
million of Riot common stock. Additional consideration, up
to a maximum of $32.5 million, can be
earned by Block Mining through 2025 through the execution of
additional power purchase agreements to add additional power
capacity. The acquisition of Block Mining immediately increases
Riot's hash rate, expands Riot's footprint geographically, and
provides exposure to additional energy markets outside of ERCOT.
For additional details about this transaction, please refer to the
investor presentation on Riot's website.
Block Mining is a vertically integrated Bitcoin
miner consisting of two operational sites, both in Kentucky, totaling 60 MW of operational
capacity with potential to expand up to 155 MW. Of the existing and
operational 60 MW, 23 MW are currently being used for self-mining,
19 MW are vacant and available for immediate miner deployment, and
18 MW are contracted by Bitcoin mining tenants under
hosting agreements. Approximately 8 MW of the 18 MW of contracted
hosting agreements have change of control provisions and will be
available for self-mining by Riot in 60-90 days. Riot intends to
further expand Block Mining's two sites, targeting 110 MW for
self-mining operations by the end of 2024. Additionally, Block
Mining owns a greenfield expansion opportunity also in Kentucky, adjacent to an existing substation,
presenting an opportunity to develop 60 MW and with potential to
expand to 150 MW.
Block Mining is a capital efficient developer and operator of
Bitcoin mining facilities with an experienced
management team that will add to Riot's ability to execute on its
leading vertically integrated strategy. The team will remain in
place to operate existing assets in Kentucky and drive expansion by leveraging
strong local relationships, access to Riot's balance sheet and its
long-term fixed price hash rate agreement with MicroBT.
Block Mining's sites are serviced by various power companies
including the Tennessee Valley Authority (TVA) and Big Rivers
Electric Corporation in the Midcontinent Independent System
Operator ("MISO") region. MISO facilitates one of the world's
largest energy markets and offers four demand response programs
allowing users to employ a sophisticated power strategy. Block
Mining can expand its operating capacity up to 110 MW under
existing agreements and has identified a pipeline that could bring
operations in Kentucky to an
aggregate of over 300 MW across three sites, subject to executing
requisite PPAs.
"The acquisition of Block Mining marks a significant milestone
for Riot as we continue to expand our growth pipeline," said Jason
Les, CEO of Riot. "This transaction allows us to diversify our
operations nationally and accelerate Block Mining's expansion in
Kentucky. With a combined 60 MW of
existing developed capacity, and a pipeline to rapidly scale to
over 300 MW, this acquisition expands our operations and further
enhances our path towards our growth target of 100 EH/s. The
acquisition of Block Mining also diversifies Riot geographically
into new power markets and brings onboard a proven operating team.
We are excited to welcome the talented Block Mining team to Riot
and look forward to working together to execute on these new
expansion opportunities in Kentucky."
"In assessing potential acquisition partners, it became evident
that Riot Platforms not only shares our vision for an
energy-efficient Bitcoin miner, but also a
complementary culture that values teamwork, creativity, and a
relentless pursuit of excellence," said Michael Stoltzner, CEO and Co-founder of Block
Mining. "Together, we are excited to leverage our collective
strengths and expertise to build Bitcoin-first data
centers that will propel us to the forefront of the industry.
"This partnership presents a unique opportunity for Riot to
expand geographically in a cost-effective manner, tapping into new
energy markets in the great state of Kentucky. By combining our resources and
knowledge, we are confident in our ability to scale operations
efficiently and sustainably, while delivering value to Riot
shareholders. As we embark on this transformative journey, we are
filled with excitement and optimism for what Block Mining brings to
the Riot family. The Block Mining team, led by Erik Ellingson, Jeremy
Witten and I look forward to working closely with the
talented team at Riot to push the boundaries of what is possible
and to lead the way in shaping the digital landscape of
tomorrow."
Transaction Details
A total purchase consideration of $18.5
million in cash was paid in connection with the closing of
the transaction plus Riot common stock equal to $74 million based on the volume weighted average
share price (VWAP) of Riot common stock over the 20-trading-day
period ending on July
18th, 2024. In addition, the sellers may be
entitled to receive additional earn-out payments subject to the
satisfaction of certain milestones related to executing the
identified pipeline for the 2024 and 2025 calendar years.
Advisors and Counsel
Stifel acted as exclusive financial advisor to Riot, and
Greenberg Traurig, LLP served as legal counsel to Riot. XMS Capital
Partners, LLC acted as exclusive financial advisor to Block Mining,
and Winston & Strawn LLP served as legal counsel to Block
Mining.
About Riot Platforms, Inc.
Riot's (NASDAQ: RIOT) vision is to be the world's leading
Bitcoin-driven infrastructure platform. Our mission is
to positively impact the sectors, networks, and communities that we
touch. We believe that the combination of an innovative spirit and
strong community partnership allows the Company to achieve
best-in-class execution and create successful outcomes.
Riot is a Bitcoin mining and digital infrastructure
company focused on a vertically integrated strategy. The Company
has Bitcoin mining operations in central Texas and Kentucky, and electrical switchgear
engineering and fabrication operations in Denver, Colorado.
For more information, visit www.riotplatforms.com.
Safe Harbor
Statements in this press release that are not historical facts
are forward-looking statements that reflect management's current
expectations, assumptions, and estimates of future performance and
economic conditions. Such statements rely on the safe harbor
provisions of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Because such statements
are subject to risks and uncertainties, actual results may differ
materially from those expressed or implied by such forward-looking
statements. Words such as "anticipates," "believes," "plans,"
"expects," "intends," "will," "potential," "hope," and similar
expressions are intended to identify forward-looking statements.
These forward-looking statements may include, but are not limited
to, statements about the benefits of acquisitions, including
financial and operating results, and the Company's plans,
objectives, expectations, and intentions. Among the risks and
uncertainties that could cause actual results to differ from those
expressed in forward-looking statements include, but are not
limited to: unaudited estimates of Bitcoin production;
our future hash rate growth (EH/s); the anticipated benefits,
construction schedule, and costs associated with the Corsicana site expansion; our expected
schedule of new miner deliveries; the impact of weather events on
our operations and results; our ability to successfully deploy new
miners; the variance in our mining pool rewards may negatively
impact our results of Bitcoin production; megawatt
("MW") capacity under development; we may not be able to realize
the anticipated benefits from immersion cooling; the integration of
acquired businesses may not be successful, or such integration may
take longer or be more difficult, time-consuming or costly to
accomplish than anticipated; failure to otherwise realize
anticipated efficiencies and strategic and financial benefits from
our acquisitions; and the impact of COVID-19 on us, our customers,
or on our suppliers in connection with our estimated timelines.
Detailed information regarding the factors identified by the
Company's management which they believe may cause actual results to
differ materially from those expressed or implied by such
forward-looking statements in this press release may be found in
the Company's filings with the U.S. Securities and Exchange
Commission (the "SEC"), including the risks, uncertainties and
other factors discussed under the sections entitled "Risk Factors"
and "Cautionary Note Regarding Forward-Looking Statements" of the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2023, as amended, and
the other filings the Company makes with the SEC, copies of which
may be obtained from the SEC's website, www.sec.gov. All
forward-looking statements included in this press release are made
only as of the date of this press release, and the Company
disclaims any intention or obligation to update or revise any such
forward-looking statements to reflect events or circumstances that
subsequently occur, or of which the Company hereafter becomes
aware, except as required by law. Persons reading this press
release are cautioned not to place undue reliance on such
forward-looking statements.
Investor Contact:
Phil McPherson
303-794-2000 ext. 110
IR@Riot.Inc
Media Contact:
Alexis Brock
303-794-2000 ext. 118
PR@Riot.Inc
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SOURCE Riot Platforms, Inc.