Earlier this week, Riot Platforms, Inc. (RIOT) announced that it had successfully acquired Block Mining, Inc., a Bitcoin miner, for $92.5m. The company said that it funded this purchase with $18.5m in cash and $74m in common stock.
Riot Platforms Acquires Block Mining After Bitfarms Poison Pill
Based on the acquisition agreement, Block Mining can also earn up to $32.5m “through the execution of additional power purchase agreements to add additional power capacity”. In its press release, Riot Platforms stated that this acquisition increases its hash rate, geographic footprint and access to energy markets outside of ERCOT (the Electric Reliability Council of Texas).
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Block Mining has two operational sites with a combined capacity of 60MW in Kentucky. Riot Platforms said that it is also possible to expand this capacity. It added that Block Mining will boost its “vertically integrated strategy”. Riot Platforms’ CEO Jason Les noted:
The acquisition of Block Mining marks a significant milestone for Riot as we continue to expand our growth pipeline. This transaction allows us to diversify our operations nationally and accelerate Block Mining’s expansion in Kentucky.
Riot Platforms also tried to make a majority bid for Bitfarms (BITF). Earlier this week, Bitfarms deployed a second shareholders rights plan – or poison pill – after it was forced to cease the first to prevent a Riot Platforms hostile takeover. Reuters reported that this new strategy will kick in when a company (or individual) attempts to accumulate more than 20% of the company’s common shares.
The Ontario Capital Markets Tribunal put a stop to the first poison pill. Bitfarms implemented it when Riot Platforms disclosed a 12% share in the company.
