A worker climbs atop a data-processing unit at the Hut 8 Cryptomining facility located off Box Springs Road in this News file.--NEWS FILE PHOTO
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Canadian cryptocurrency company Hut 8 Mining Corp. says it has signed a deal to merge with U.S. Data Mining Group Inc., the company behind US Bitcoin Corp.
Hut 8’s three data-processing centres in Canada, including its flagship operation in Medicine Hat, would combine with four major operations centres located in New York state, Nebraska and Texas. The new company would have contractual access to 825 megawatts of electricity supply to power computing infrastructure, including 220 megawatts at USBTC’s King-Mountain, Tex. facility that is co-located through a subsidiary near a wind farm.
The Medicine Hat facility, considered one of the largest in Canada, holds capacity totalling 68 megawatts. Hut 8 also operates in Drumheller and Kelowna.
“This Transaction has given us the opportunity to leverage the significant, unencumbered Bitcoin (holdings) we have (retained) to date,” said Jaime Leverton, CEO of Hut 8.
“Bringing together Hut 8’s operational track record and diversified revenue streams with US Bitcoin’s scalable mining sites, sizable hosting business and industry-leading managed infrastructure operations not only accelerates our diversified strategy … but also establishes us as a strong, U.S.-based player that is ready and able to seize additional opportunities as they arise.”
Under the agreement, the combined company will be named Hut 8 Corp. and will be a U.S.-domiciled company.
“We’ve been searching for the right partner to join us on our ambitious growth journey for some time and are confident that Hut 8 is the perfect fit,” said Michael Ho, co-founder and CEO of USBTC. “We were initially attracted to Hut 8’s strong track record, admirable fiscal management through all market cycles and like-minded approach to generating diversified lines of revenue. Through this process, we’ve determined that the strategic impact this transaction will drive is significant: we see a clear path to leveraging our collective vision to drive innovative technology advancements and become a second-to-none operator.”
The deal will see shareholders of Hut 8 receive one share in the combined company for every five Hut 8 shares they own, while shareholders of USBTC will receive two shares in the new company for every three USBTC shares they hold. Shareholders meetings could proceed in the second quarter of 2023. Hut 8 will also provide bridging finance expected to total US$6 million.
Ownership in the new company will be about evenly split between the existing Hut 8 and USBTC shareholders.
The aggregate consideration implies a combined market capitalization of about US$990 million.
The deal requires approval by shareholders of both Hut 8 and USBTC as well as regulatory and court approvals.
