Marathon Digital Holdings, Inc.
(NASDAQ:MARA) ("Marathon"
or "Company"), one of the world’s largest publicly traded
Bitcoin miners and a leader in supporting and securing the Bitcoin
ecosystem, has entered into a definitive purchase agreement to
acquire Applied Digital Corporation’s (“Applied Digital”) Bitcoin
mining data center in Garden City, Texas, with a name plate
capacity of 200 megawatts, for a purchase price of $87.3 million,
or approximately $437,000 per megawatt, prior to any purchase price
adjustments. Marathon will pay the purchase price in cash from its
balance sheet.
This transaction is Marathon’s second major
acquisition of data centers dedicated to Bitcoin mining in the last
four months and increases the amount of self-owned and operated
megawatts in Marathon’s Bitcoin mining portfolio to 54%. Prior to
the acquisition of its first two data centers, which closed in
January of this year, Marathon’s Bitcoin mining portfolio consisted
of 584 megawatts, 3% of which resided on sites directly owned and
operated by the Company. Following the close of this acquisition
and the anticipated expansion of the site in 2024, Marathon will
have increased the number of megawatts in its mining portfolio to
1.1 gigawatts, 54% of which will reside on sites directly owned and
operated by the Company.
The Bitcoin mining data center in Garden City,
Texas is located adjacent to a wind farm and uses predominantly
renewable energy. It was constructed and energized in 2023 and
supports a workforce of approximately 25 employees. At this site,
Marathon is currently converting approximately 100 megawatts (c.
4.5 exahash of miners) into economic value via Bitcoin mining.
By acquiring this data center, Marathon will
take direct ownership of its current on-site operations and will
also gain an additional 100 megawatts of capacity in which to
expand, 32 megawatts of which are expected to be available as of
the closing date and the remainder of which are subject to
regulatory approvals. Marathon expects to expand its presence at
the site in 2024 by an additional 100 megawatts to accommodate a
total of 200-megawatts of capacity dedicated exclusively to
Marathon’s Bitcoin mining operations.
In addition to providing Marathon with more
influential and secure ownership of its operations as well as
expansion opportunities, this transaction is also expected to
reduce the cost per coin of Marathon’s current operations at the
site by approximately 20%.
The transaction is subject to customary closing
conditions and is expected to close in the second quarter of
2024.
Management Commentary
“After taking over ownership and operational
control of the data centers we recently acquired in Granbury, Texas
and Kearney Nebraska, we are building on that momentum by now
acquiring the Bitcoin mining data center in Garden City, Texas from
Applied Digital,” said Fred Thiel, Marathon’s chairman and CEO.
“This transaction increases our influence over our current
operations, reduces our cost per coin by approximately 20% at the
site, and provides us with an additional 100 megawatts of capacity
in which to expand.
“Following the close of this transaction and the
anticipated expansion of the site this year, our Bitcoin mining
portfolio will consist of approximately 1.1 gigawatts of capacity,
54% of which will reside on sites we directly own and operate, and
all of which are diversified across eleven sites on three
continents. As a result, we will directly own and operate more
megawatts than we had in our entire Bitcoin mining portfolio in
December 2023.
“As a close collaborator of Applied Digital, we
are intimately familiar with the site’s operations. Therefore, we
expect a smooth transition as we work to integrate this renewably
powered data center into our diversified portfolio of Bitcoin
mining assets.”
Wes Cummins, CEO and chairman of the board at
Applied Digital, commented, “Marathon has been a valuable partner
of ours since 2022, and we welcome them as the new stewards of this
state-of-the-art bitcoin mining data center in Garden City, Texas.
We look forward to closing this mutually beneficial transaction,
which we believe allows both companies to pursue their long-term
strategies more effectively.”
Advisors
Paul, Weiss, Rifkind, Wharton & Garrison LLP
is serving as legal advisor to Marathon in connection with the
transaction and Lowenstein Sandler LLP is serving as legal advisor
to Applied Digital.
Investor Notice
Investing in our securities involves a high
degree of risk. Before making an investment decision, you should
carefully consider the risks, uncertainties and forward-looking
statements described under "Risk Factors" in Item 1A of our most
recent Annual Report on Form 10-K for the fiscal year ended
December 31, 2023, filed with the SEC on February 28, 2024. If any
of these risks were to occur, our business, financial condition or
results of operations would likely suffer. In that event, the value
of our securities could decline, and you could lose part or all of
your investment. The risks and uncertainties we describe are not
the only ones facing us. Additional risks not presently known to us
or that we currently deem immaterial may also impair our business
operations. In addition, our past financial performance may not be
a reliable indicator of future performance, and historical trends
should not be used to anticipate results in the future. See
"Forward-Looking Statements" below.
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of the federal securities laws.
Forward-looking statements in this press release relate to the
expected timing and achievement of our growth targets, specifically
relating to our anticipated hash rate and exahash growth. You can
identify forward-looking statements by the use of words such as
“may,” “will,” “could,” “anticipate,” “expect,” “intend,”
“believe,” “continue,” or the negative of such terms, or other
comparable terminology. Forward-looking statements include the
assumptions underlying or relating to such statements. The Company
has based these forward-looking statements largely on its current
expectations and projections about future events and trends that we
believe may affect its business, results of operations and
financial condition. The outcomes of the events described in these
forward-looking statements are subject to risks, uncertainties and
other factors described under the heading “Risk Factors” in the
reports the Company files with the Securities and Exchange
Commission. The Company cannot assure you that the events and
circumstances reflected in the forward-looking statements will be
achieved or occur, and actual results could differ materially from
those expressed or implied in the forward-looking statements. The
forward-looking statements made in this press release relate only
to events as of the date of this press release. The Company
undertakes no obligation to update any forward-looking statement to
reflect events or circumstances after the date on which the
statement is made.
About Marathon Digital
Holdings
Marathon is a digital asset technology company
that focuses on supporting and securing the Bitcoin ecosystem. The
Company is currently in the process of becoming one of the largest
and most sustainably powered Bitcoin mining operations in North
America.
For more information, visit www.mara.com, or
follow us on:
Twitter: @MarathonDHLinkedIn:
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Marathon Digital
Holdings Company Contact:
Telephone: 800-804-1690Email: ir@mara.com
Marathon Digital Holdings Media
Contact:Email: marathon@wachsman.com
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