Hut 8 Mining Corp., an innovation-focused digital asset and crypto mining company, has announced that it has entered into a definitive agreement to purchase the cloud and colocation data centre business from TeraGo Inc. (the ‘Data Center Business’). Once complete, the acquisition will establish Hut 8 as a leading high-performance computing platform, providing unique positioning for the Company within the digital asset ecosystem.
The acquisition consists of five data centres across Canada with a comprehensive information technology offering that includes a complete selection of scalable cloud services. The Data Center Business spans from Toronto to Vancouver with over 36,000 square feet of geo-diverse data centre space. Existing saleable power capacity totals 4.1 MW, with a further 1.5 MW of expansion capacity available within existing shelf space in the Kelowna location. Hut 8 is acquiring customers, employees, and a diverse product offering as part of the acquisition.
Hut 8 asserts that this acquisition constitutes a pivotal moment in positioning themselves as an innovative and diversified player in the digital asset and high-performance computing sectors.
The transaction enhances Hut 8’s diversification profile by establishing a broad high-performance computing platform with recurring revenues and a stable cash flow, as well as establishes a platform with approximately 400 commercial customers, across a variety of industry verticals including gaming, visual effects, and government agencies. This means that Hut 8 will become the only crypto miner with enterprise-grade data centre capabilities.
Other benefits include providing exposure to secular tailwinds supporting the growth of the resilient data centre sector; creating a platform for the development of applications and services to underserved markets and customers in the growing digital asset, blockchain, gaming, and web 3.0 industries; accelerating Hut 8’s ability to address the need for HPC (High- Performance Computing) and GPU (Graphics Processing Units) compute; enhancement of their existing crypto mining operations and team; and providing access to operating sites which are connected to electrical grids powered by significant renewables and emissions-free resources.
“As a team of Bitcoin and blockchain bulls, we are thrilled with the transformative growth opportunity this investment provides Hut 8,” said Jaime Leverton, chief executive officer of the Company. “The acquisition of this complementary business diversifies Hut 8’s operations with a discrete, steady cash flow, that is uncorrelated to digital asset mining. This acquisition also puts us at the forefront of the accelerated digitisation of industry, establishing us as the bridge between traditional and nascent iterations of high-performance computing. Our unconventional approach to revolutionising conventional assets serves to drive Hut 8’s growth, innovation and market share in the high-performance computing, blockchain, and Web 3.0 industries.”
Under the terms of the agreement, the consideration payable to TeraGo Inc. will consist of C$30 million, to be funded from existing cash on the Company’s balance sheet. Hut 8 will retain substantially all current Data Center Business employees. The transaction has been approved by the board of directors of Hut 8 and TeraGo and is expected to close in the first quarter of 2022.