AUSTIN, Texas and
CHICAGO, July 21, 2021 /PRNewswire/ -- Core Scientific
Holding Co. ("Core Scientific" or the "Company"), a leader in
customizable infrastructure and software solutions to large scale
customers for blockchain hosting and digital asset mining, and
Power & Digital Infrastructure Acquisition Corp. (Nasdaq:
XPDI), a publicly traded special purpose acquisition company, today
announced they have entered into a definitive merger agreement
pursuant to which XPDI will acquire the Company (the
"Transaction"). As a result of the Transaction, which values
the Company at a pro forma enterprise value of
approximately $4.3 billion, the combined company is expected
to operate as Core Scientific, Inc. and remain a publicly listed
company on the NASDAQ stock market.
Core Scientific and XPDI Highlights
Core Scientific
is the largest blockchain infrastructure, hosting provider and
digital asset miner in North
America, with estimated year-end power capacity of
approximately 510 megawatts through four dedicated facilities
strategically located across the United
States. The Transaction positions Core Scientific to mine
for digital assets and provide and develop hosting and other
blockchain services at scale, using low cost, clean and renewable
energy for a growing, global decentralized finance
industry.
In addition to offering proprietary digital asset mining
infrastructure and management software to large-scale partners
around the world, Core Scientific's pending acquisition of
Blockcap, Inc. ("Blockcap"), a leader in digital asset mining,
positions the Company as North
America's largest vertically integrated self-mining
business. Blockcap's recent acquisition of RADAR, a pioneer in the
blockchain technology space, further strengthens Core Scientific's
leadership position and value creation potential through the
development of decentralized finance ("DeFi") products and
services. Core Scientific intends to grow its business while
maintaining 100% net carbon neutral operations through a
combination of clean energy inputs and the purchase of renewable
energy credits.
XPDI believes that Core Scientific presents an opportunity to
invest in a leader in multiple XPDI target industry sectors of
blockchain and frontier technology infrastructure. XPDI's
management team and independent directors comprise experienced
investors, advisors, developers, and operators in energy and ESG.
XPDI is a special purpose acquisition company with a blockchain
infrastructure focus supported by BlackRock, the world's largest
asset manager and the anchor investor in XPDI. XPDI closed
its upsized, oversubscribed initial public offering in February 2021 and has approximately $345 million cash in trust.
Management and Governance
Following the close of the
Transaction, the combined company will continue to be led by
Mike Levitt as Co-Chairman and Chief
Executive Officer of Core Scientific. Mr. Levitt is supported
by a highly successful and agile leadership team with significant
expertise across the technology, blockchain, and financial services
industries. Darin Feinstein,
Chief Executive Officer and Founder of Blockcap and Co-Founder of
Core Scientific, will serve as Co-Chairman of the Company. Mr.
Levitt, Mr. Feinstein, and the management team of Core Scientific
have a proven track record of building and scaling businesses and
delivering long-term shareholder value.
"We are excited to enter into the Transaction at a significant
inflection point in Core Scientific's growth trajectory and in the
advancement of blockchain technology," said Mr. Levitt. "We
have built the largest blockchain hosting provider and digital
asset miner in North America. Our
diversified business is positioned to continue supporting the
growth and adoption of digital assets globally. We are successfully
leveraging our first mover advantage, scale, proprietary designs
and software, network of strategic relationships, and culture of
innovation to create value for our customers and
stakeholders. With our pending acquisition of Blockcap, we
look forward to growing our self-mining digital asset business
while continuing to deliver best-in-class reliability and
performance to leading blockchain innovators."
Said Darin Feinstein, "Core
Scientific's blockchain infrastructure business is unparalleled,
backed by more than 70 blockchain and infrastructure-related
patents and applications, and led by an amazing team, which now
will be creating value for our collective stakeholders. We
are proud to unite our companies and move forward into the
capital markets."
Patrick Eilers, Chief Executive
Officer of XPDI, said, "Core Scientific is at the epicenter of
disruptive technologies, which collectively comprise a large and
growing market opportunity for Bitcoin and other digital assets.
XPDI views the Company as solving a pressing need for a credible,
reliable and focused enterprise solutions provider capable of
powering these new, long-term growth markets and adjacencies
presented by broader blockchain applications and
technologies. Moreover, the Company's commitment to ESG as a
100% net carbon-neutral business aligns with XPDI's aim to take
today's high growth sectors and power them with more sustainable
sources of energy."
Ted Brombach, Chairman of XPDI,
further stated "We are very pleased to support Core Scientific's
transition to the public markets and believe that the Company's
vertical integration will provide a competitive advantage in the
industry."
Transaction Overview
The Transaction values the
combined company at an implied fully diluted pro forma enterprise
value of approximately $4.3 billion,
representing a 8.8x multiple of Core Scientific's 2021 projected
revenue of $493 million and a 21.4 x
multiple of 2021 projected adjusted EBITDA of $203 million. The Company was adjusted
EBITDA positive for the year ended December 31, 2020.
The Transaction is expected to provide in excess of $300 million in net cash proceeds to Core
Scientific at closing, after transaction expenses and assuming no
redemptions of shares by XPDI's existing public stockholders.
Existing Core Scientific stockholders are retaining 100% of their
equity in the combined company. Core Scientific stockholders
(including former stockholders of Blockcap) will own approximately
89%, XPDI public stockholders will own approximately 8% and XPDI's
sponsor will own approximately 2% of the issued and outstanding
shares of common stock, respectively, of the combined company at
closing. The proceeds from the Transaction are expected to
fund mining equipment purchases and infrastructure build out as the
Company expands its leadership position.
The Core Scientific and XPDI Boards of Directors have
unanimously approved the proposed merger, which is expected to be
completed in the fourth quarter of 2021, subject to, among other
things, regulatory approval, the approval by Core Scientific's and
XPDI's stockholders of the proposed merger and satisfaction or
waiver of other customary closing conditions.
Additional information about the proposed merger, including a
copy of the merger agreement and investor presentation, will be
provided in a Current Report on Form 8-K to be filed by XPDI today
with the Securities and Exchange Commission (the "SEC") and
available at www.sec.gov. The investor presentation can also be
found on the Investors section of Core Scientific's website at
www.corescientific.com. XPDI intends to file a registration
statement, which will contain a proxy statement/prospectus, with
the SEC in connection with the Transaction.
Advisors
Barclays Capital Inc. is serving as financial
and capital markets advisor to XPDI. XMS Capital Partners,
LLC is serving as financial advisor to XPDI in connection with the
Transaction. Kirkland & Ellis LLP is serving as legal
advisors to XPDI.
Evercore is serving as financial advisor to Core Scientific in
connection with the Transaction. Cooley LLP is serving as legal
advisors to Core Scientific.
About Core Scientific
Core Scientific provides
high-performance infrastructure that powers the world's leading
blockchain companies. Using state-of-the-art facilities, patent
pending technology and best-in-class hosting solutions, Core
Scientific is primed to power leading edge servers for large scale
operations while working to develop enterprise software solutions
for the most complex Blockchain challenges. To learn more,
visit www.corescientific.com.
About Power & Digital Infrastructure Acquisition
Corp.
Power & Digital Infrastructure Acquisition Corp.
is a blank check company sponsored by XPDI Sponsor LLC, led by
Energy & Power Transition Partners, LLC and XMS XPDI Sponsor
Holdings LLC, an entity owned by professionals XMS Capital
Partners, LLC, and formed for the purpose of effecting a merger,
capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination with one or more
businesses or entities.
Forward Looking Statements
This press release
includes "forward-looking statements'' within the meaning of
the "safe harbor" provisions of the United States Private
Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of words such as
"estimate," "plan," "project," "forecast," "intend," "will,"
"expect," "anticipate," "believe," "seek," "target" or other
similar expressions that predict or indicate future events or
trends or that are not statements of historical matters. These
forward-looking statements include, but are not limited to,
statements regarding projections, estimates and forecasts of
revenue and other financial and performance metrics, projections of
market opportunity and expectations, the estimated implied
enterprise value of the combined company, Core Scientific's ability
to scale and grow its business, source clean and
renewable energy, the advantages and expected growth of the
combined company, the combined company's ability to source and
retain talent, the cash position of the combined company following
closing, XPDI's and Core Scientific's ability to consummate the
Transaction, and expectations related to the terms and timing of
the Transaction. These statements are based on various assumptions,
whether or not identified in this press release, and on the current
expectations of XPDI's and Core Scientific's management and are not
predictions of actual performance.
These forward-looking statements are provided for illustrative
purposes only and are not intended to serve, and must not be relied
on by any investor, as a guarantee, an assurance, a prediction or a
definitive statement of fact or probability. Actual events and
circumstances are difficult or impossible to predict and will
differ from assumptions. Many actual events and circumstances are
beyond the control of XPDI and Core Scientific. These
forward-looking statements are subject to a number of risks and
uncertainties, including the ability of XPDI and Core Scientific to
successfully or timely consummate the proposed Transaction,
including the risk that any regulatory approvals are not obtained,
are delayed or are subject to unanticipated conditions that could
adversely affect the combined company or the expected benefits of
the proposed Transaction or approval of the shareholders of XPDI or
Core Scientific; failure to realize the anticipated benefits of the
proposed Transaction; the combined company's ability to execute on
its business model, potential business expansion opportunities and
growth strategies, retain and expand customers' use of its services
and attract new customers, and source and maintain talent; risks
relating to the combined company's sources of cash and cash
resources; risks relating to the blockchain and frontier technology
infrastructure sectors, including the unregulated nature of the
cryptocurrency space and potential future regulations, volatility
of the price of digital assets, changes in the award structure for
solving digital assets and limited availability of electric power
resources; risks relating to Core Scientific's and the combined
company's vulnerability to security breaches; risks relating to the
uncertainty of the projected financial information with respect to
the combined company; the combined company's ability to manage
future growth; the effects of competition on the combined company's
future business; the amount of redemption requests made by XPDI's
public stockholders; the ability of XPDI or the combined company to
issue equity or equity-linked securities in connection with the
proposed Transaction or in the future; the outcome of any potential
litigation, government and regulatory proceedings, investigations
and inquiries; the impact of the COVID-19 pandemic on Core
Scientific's or the combined company's business and the global
economy; and those factors discussed in XPDI's final prospectus
related to its initial public offering dated February 9, 2021 under the heading "Risk
Factors," in XPDI's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2021 under the
heading "Risk Factors" filed with the SEC on May 25, 2021 and other documents of XPDI filed,
or to be filed, with the SEC. If any of these risks materialize or
our assumptions prove incorrect, actual results could differ
materially from the results implied by these forward-looking
statements. There may be additional risks that neither XPDI nor
Core Scientific presently know or that XPDI and Core Scientific
currently believe are immaterial that could also cause actual
results to differ from those contained in the forward-looking
statements. In addition, forward-looking statements reflect XPDI's
and Core Scientific's expectations, plans or forecasts of future
events and views as of the date of this press release. XPDI and
Core Scientific anticipate that subsequent events and developments
will cause XPDI's and Core Scientific's assessments to change.
However, while XPDI and Core Scientific may elect to update these
forward-looking statements at some point in the future, XPDI and
Core Scientific specifically disclaim any obligation to do so.
These forward-looking statements should not be relied upon as
representing XPDI's and Core Scientific's assessments as of any
date subsequent to the date of this press release. Accordingly,
undue reliance should not be placed upon the forward-looking
statements.
Use of Projections
This press release contains
projected financial information with respect to Core
Scientific. Such projected financial information constitutes
forward-looking information, and is for illustrative purposes only
and should not be relied upon as necessarily being indicative of
future results. The assumptions and estimates underlying such
projected financial information are inherently uncertain and are
subject to a wide variety of significant business, economic,
competitive and other risks and uncertainties that could cause
actual results to differ materially from those contained in the
prospective financial information. See "Forward-Looking Statements"
above. Actual results may differ materially from the results
contemplated by the projected financial information contained in
this press release, and the inclusion of such information in this
press release should not be regarded as a representation by any
person that the results reflected in such projections will be
achieved. Neither the independent auditors of XPDI nor Core
Scientific, audited, reviewed, compiled, or performed any
procedures with respect to the projections for the purpose of their
inclusion in this press release, and accordingly, neither of them
expressed an opinion or provided any other form of assurance with
respect thereto for the purpose of this press release.
Additional Information and Where to Find It
The
proposed Transaction will be submitted to stockholders of XPDI for
their consideration. XPDI intends to file a registration statement
on Form S-4 (the "Registration Statement") with the SEC which will
include preliminary and definitive proxy statements to be
distributed to XPDI's stockholders in connection with XPDI's
solicitation for proxies for the vote by XPDI's stockholders in
connection with the proposed Transaction and other matters as
described in the Registration Statement, as well as the prospectus
relating to the offer of the securities to be issued to Core
Scientific's stockholders in connection with the completion of the
proposed Transaction. After the Registration Statement has been
filed and declared effective, XPDI will mail a definitive proxy
statement and other relevant documents to its stockholders as of
the record date established for voting on the proposed Transaction.
XPDI's stockholders and other interested persons are advised to
read, once available, the preliminary proxy statement / prospectus
and any amendments thereto and, once available, the definitive
proxy statement / prospectus, in connection with XPDI's
solicitation of proxies for its special meeting of stockholders to
be held to approve, among other things, the proposed Transaction,
because these documents will contain important information about
XPDI, Core Scientific and the proposed Transaction. Stockholders
may also obtain a copy of the preliminary or definitive proxy
statement, once available, as well as other documents filed with
the SEC regarding the proposed Transaction and other documents
filed with the SEC by XPDI, without charge, at the SEC's website
located at www.sec.gov or by directing a request to 321 North Clark
Street, Suite 2440, Chicago, IL
60654.
INVESTMENT IN ANY SECURITIES DESCRIBED HEREIN HAS NOT BEEN
APPROVED OR DISAPPROVED BY THE SEC OR ANY OTHER REGULATORY
AUTHORITY NOR HAS ANY AUTHORITY PASSED UPON OR ENDORSED THE MERITS
OF THE OFFERING OR THE ACCURACY OR ADEQUACY OF THE INFORMATION
CONTAINED HEREIN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Participants in the Solicitation
XPDI, Core
Scientific and certain of their respective directors, executive
officers and other members of management and employees may, under
SEC rules, be deemed to be participants in the solicitations of
proxies from XPDI's stockholders in connection with the proposed
Transaction. Information regarding the persons who may, under SEC
rules, be deemed participants in the solicitation of XPDI's
stockholders in connection with the proposed Transaction will be
set forth in XPDI's proxy statement / prospectus when it is filed
with the SEC. You can find more information about XPDI's directors
and executive officers in XPDI's final prospectus related to its
initial public offering dated February
9, 2021. Additional information regarding the
participants in the proxy solicitation and a description of their
direct and indirect interests will be included in the proxy
statement / prospectus when it becomes available. Stockholders,
potential investors and other interested persons should read the
proxy statement / prospectus carefully when it becomes available
before making any voting or investment decisions. You may obtain
free copies of these documents from the sources indicated
above.
No Offer or Solicitation
This press release does not
constitute an offer to sell or the solicitation of an offer to buy
any securities, or a solicitation of any vote or approval, nor
shall there be any sale of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction.
Footnote for 2021 &
2022:
Forecasted
results for the years ended December 31,
2021 and 2022 are based on current estimates of Core
Scientific's revenue and operating income excluding
depreciation and amortization. Core Scientific does not, and
cannot without unreasonable effort, forecast net income or
other discrete items such as interest expense, net, stock-based
compensation or gains, losses or impairments on digital currency
assets and property, plant and equipment. Adjusted EBITDA, which is
not prepared under any comprehensive set of accounting rules or
principles, has limitations as an analytical tool and you should
not consider it in isolation or as a substitute for analysis of any
financial results as reported in accordance with generally accepted
accounting principles in the United
States ("GAAP"). In particular, Adjusted EBITDA should
not be viewed as a substitute for, or superior to, net income
(loss) prepared in accordance with GAAP as a measure of
profitability or liquidity.
Source: Core Scientific
Contacts
Investors:
Steven Gitlin
ir@corescientific.com
Media:
Lorna Blount
press@corescientific.com
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