German company Northern Data has struck a deal with mining firm Bitfield involving the purchase of at least an 86% stake and the indirect acquisition of around 33,000 ASIC miners.
According to a press release, 6,600 devices have already been installed and are operating in Northern Data's data centres.
The deployment of the 26,000 new miners already in place is expected to be completed by the end of the first quarter of 2022, mainly at sites in North America.
At the time of the deal, Bitfield's hash rate is around 0.7 EH/s. Once the launch of the equipment is complete, the figure will be approximately 3 EH/s.
Computing capacity managed by Northern Data, including hosting clients, will reach approximately 6 EH/s.
The deal between the firms is in the form of a €400 million share swap and involves the issuance of up to 5.1 million Northern Data securities.
The German firm's business includes hosting services for mining equipment, proprietary bitcoin and altcoin mining operations and cloud computing.
The Bitfield acquisition is expected to facilitate vertical integration and value creation in the mining industry with an eye to sustainability (ESG).
"The company intends to use the free cash flow generated from the transaction to invest in further growth. This will include increasing the number of ASIC miners and GPU server systems, expanding data centre infrastructure and establishing new sites," the press release said.
The firm's management expects revenues of €180-€220m in 2021 and pre-tax profits in the €100-€125m range.
In 2019, Northern Data took over Whinstone US, which was building a 1GW bitcoin mining data centre in Texas. One of its first residents was a mining subsidiary of Japanese financial giant SBI Holdings.
Recall that in October 2020, analysts at Arcane Research concluded that the dominance of Chinese miners was steadily decreasing due to the increase in computing capacity in other countries, including the US.
In May 2021, authorities in the Middle Kingdom said they intended to take action against the industry. Over the following month, several regional governments ordered miners to cease operations.
Researchers from the Cambridge Centre for Alternative Finance found that the share of Chinese hashray miners fell below 50% as early as March 2021 before the crackdown on the industry began.