Riot Platforms Powers Up: Eyes $185 Million Acquisition Deal To Boost Mining Capacity

Riot Platforms, Inc. RIOT shares are trading higher premarket on Monday. On Friday, the company inked a non-binding term sheet outlining the potential acquisition of certain assets owned by Rhodium Encore LLC at Riot’s Rockdale Facility.

The proposed transaction would be carried out by Whinstone US, Inc., or an affiliate, a wholly-owned Riot subsidiary.

As per the deal, Whinstone will provide Rhodium with a total consideration of $185 million upon the completion of the transaction.

This includes cash of $129.9 million, a $6.1 million return of Rhodium’s power security deposit, and $49.0 million in Riot shares, valued based on the volume-weighted average price over the 10 trading days leading up to the closing.

In return, Rhodium will transfer ownership of all tangible assets at the Rockdale Facility, including ASIC miners, and vacate the premises within three business days post-closing.

Additionally, Riot has filed a motion to approve a settlement under Federal Rule of Bankruptcy Procedure 9019 in Rhodium’s ongoing bankruptcy case.

Riot will then assume Rhodium’s 125 MW power capacity and operational assets, consolidating the entire facility’s power load for self-use.

Additionally, both Whinstone and Rhodium will dismiss all ongoing litigation, including appeals, and waive any future claims unrelated to the transaction’s completion.

The transaction and settlement require Bankruptcy Court approval and final agreements between Whinstone and Rhodium. Riot will share updates as the process advances.

As of FY24, RIOT had $277.9 million in cash on hand and $134.3 million in marketable equity securities.

Investors can gain exposure to the stock via Grayscale Funds Trust Grayscale Bitcoin Miners ETF MNRS and Global X Blockchain ETF BKCH.

Price Action: RIOT shares are up 4.03% at $8.27 premarket at the last check Monday.

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