Marathon Expands Bitcoin Mining Portfolio with $179 Million Acquisition
The move is anticipated to enhance Marathon's influence over the mining sites and contribute to the optimization of their recently acquired assets.
Marathon Digital has agreed to pay a termination fee of $13.5 million to acquire full operational control of two recently acquired bitcoin mining facilities from Hut 8. The mining giant, Marathon, plans to replace Hut 8 as the operator of sites in Granbury, Texas, and Kearney, Nebraska by April 30. Marathon Digital Holdings, a key player in supporting and securing the Bitcoin ecosystem, has finalized a definitive purchase agreement to acquire two operational Bitcoin mining sites from subsidiaries of Generate Capital, PBC for a total of $178.6 million. The acquisition marks Marathon's shift from an asset-light organization to one managing a diversified portfolio of Bitcoin mining operations.
The acquired sites, located in Granbury, Texas, and Kearney, Nebraska, have a combined capacity of 390 megawatts, strengthening Marathon's position in the Bitcoin mining space. This move brings Marathon's Bitcoin mining portfolio to approximately 910 megawatts of capacity, a 56% increase. Following the acquisition, 45% of the portfolio will be directly owned by Marathon, with the remaining 55% hosted by third parties.
With ownership of these sites, Marathon anticipates immediate expansion opportunities and operational efficiencies. The vacant capacity at the acquired sites provides Marathon with the potential to double its current operational hash rate to around 50 exahashes over the next 18-24 months.
The transaction is structured to optimize the cost per coin, with Marathon expecting a 30% reduction in the cost of its current operations at the acquired sites. The company plans to fill available capacity with its miners, enhancing hash rate and operational efficiencies. Marathon has 7 exahashes of miners on order, with the first tranche scheduled for delivery and installation in January 2024.
Fred Thiel, Chairman and CEO of Marathon, expressed excitement about the acquisition, highlighting the opportunity to reduce Bitcoin production costs, capitalize on energy hedging, and expand operational capacity. Salman Khan, Marathon's CFO, emphasized the strategic efforts made to strengthen the company's balance sheet, enabling it to pursue accretive opportunities without adding debt or issuing future equity.
The transaction is expected to close in the first quarter of 2024, subject to customary closing conditions. Marathon's acquisition of these sites not only fortifies its position in the Bitcoin ecosystem but also aligns with its long-term strategy of growth and innovation in the digital currency space.
