- Transaction builds a U.S. based Bitcoin mining champion
- Combined company valued at an enterprise value of $2.0
billion
- Includes $425 million fully committed PIPE investment, secured
with anchor investors, including Fidelity Management & Research
Company and Counterpoint Global (Morgan Stanley)
- The PIPE investment includes $50 million investment-in-kind
from Cipher Mining’s parent company, Bitfury, and is structured as
a credit for future purchases of operating services and equipment
for Cipher
- Planned mining capacity of 745MW by the end of 2025 and
industry leading cost of energy of approximately 2.7c/kWh
- The transaction is anticipated to close in Q2 2021
Cipher Mining Technologies Inc. (“Cipher Mining”), a newly
formed U.S.-based Bitcoin mining operation, and Good Works
Acquisition Corp. (Nasdaq: GWAC) (“Good Works”), a U.S.
publicly-traded special purpose acquisition company, today
announced they have entered a definitive agreement for a business
combination. Upon closing of the transaction, the combined company
will be named Cipher Mining Inc. (“Cipher” or the “Company”) and is
expected to be listed on the Nasdaq under the new ticker symbol
“CIFR”.
Company Highlights
Cipher Mining is a newly formed subsidiary of Bitfury Top HoldCo
B.V. (“Bitfury” and, together with its subsidiaries, including
Bitfury Holding B.V., “Bitfury Group”). The Bitfury Group is a
leading provider of Bitcoin mining hardware and other blockchain
software and services. Since its inception in 2011, Bitfury Group
has deployed more than 500+ MW of computing power and mined more
than 600 thousand Bitcoin. As a stand-alone company, Cipher is
expected to be positioned as a U.S.-centric Bitcoin mining champion
with potential to reach a cumulative deployed capacity of 745MW by
the end of 2025. The Company’s U.S.-based data centers are planned
to come on-line between Q4 2021 and Q2 2022 with a total of 445MW
of power capacity and planned expansion of an additional 300MW
deployed between 2023 and 2025. As the projected largest scale
mining platform in the U.S., Cipher will provide investors the
opportunity to invest in the Bitcoin industry via a leading mining
company operating in a highly transparent and well-regulated
environment.
Cipher’s contractual relationship with Bitfury Group is also
expected to provide the Company with compelling value via access to
best-in-class mining equipment and proven on-site operations
development, management and maintenance experience.
Good Works’ Co-Chairman, Doug Wurth, commented, “The Good Works
team collectively has a long history in the alternative asset
markets. We were attracted to Cipher Mining as we believe the
Bitcoin mining space represents a compelling way to gain
risk-adjusted exposure to the growing crypto ecosystem. We brought
to the table experience in power hosting arrangements, which gave
us a clear-eyed view of the advantages of Cipher Mining’s power
contracts, and the extraordinary value of its partnership with
Bitfury Group. Cipher Mining’s management team and the size of its
operations will enable it to execute well across many price
environments, and we are excited to help them become the leading
Bitcoin mining company in the United States.”
Tyler Page, Cipher Mining’s CEO continued, “Historically, the
Bitcoin mining industry featured smaller, poorly capitalized, less
experienced companies that were not fully equipped to manage the
underlying price swings associated with Bitcoin. With this
transaction, we will be able to combine the formidable skill sets
and technologies developed by Bitfury Group over the past 10 years
with what we believe will be a leadership position on the global
cost curve, and thereby create a true leader in the Bitcoin mining
industry. We believe that our U.S. domicile provides us additional
advantages of low-cost, reliable power and a transparent, stable
and secure regulatory and corporate environment. This combination
of factors positions us to become the leading Bitcoin miner and
also enables future vertical integration opportunities across the
Bitcoin ecosystem.”
Transaction Overview
The transaction values the combined company at an enterprise
value of US $2.0 billion. Pursuant to the merger and following the
share exchanges, the combined company is expected to receive
approximately US $595 million in gross cash proceeds from a
combination of cash from a US $425 million fully committed stock
PIPE, including a $50 million investment in-kind from Bitfury, and
approximately US $170 million in cash held in Good Works’ trust
account from its initial public offering in October 2020, assuming
no public shareholders exercise their redemption rights at closing
requiring payment from Good Works’ trust account. Cash from the
transaction, net of transaction fees, will be used to fund the
planned build out of the mining facilities of the company.
The PIPE is anchored by institutional investors including funds
and accounts managed by Fidelity Management & Research Company
and Counterpoint Global (Morgan Stanley). Current Cipher Mining
shareholders will become the majority owners of the combined
company at closing with approximately 70% ownership in the pro
forma company and all existing shareholders and investors will
continue to hold their equity ownership subject to a two year
lock-up period. The PIPE investors, including Bitfury, will own
approximately 15%, Good Works, inclusive of its founder shares will
own approximately 7.5%, and Cipher employees will own approximately
7% of the pro forma company at closing.
Both the board of directors and shareholders of Cipher Mining
have unanimously approved the proposed transaction, which is
expected to be completed in the second quarter of 2021. The board
of directors of Good Works has also unanimously approved the
proposed transaction. The proposed transaction will be subject to
approval by Good Works’ stockholders and satisfaction, or the
waiver of the closing conditions identified in the agreement and
plan of merger.
Additional information about the proposed transaction, including
a copy of the agreement and plan of merger will be provided in a
Current Report on Form 8-K to be filed by Good Works today with the
U.S. Securities and Exchange Commission (the “SEC”) and will be
available at www.sec.gov.
Advisors
J.P. Morgan Securities LLC is serving as exclusive advisor and
lead placement agent to Good Works, and Wells Fargo Securities, LLC
is serving as lead financial advisor to Cipher Mining. Wells Fargo
Securities, LLC is also serving as co-placement agent on the
PIPE.
Schiff Hardin LLP is acting as legal counsel to Good Works.
Latham & Watkins LLP is acting as legal counsel to Cipher
Mining. Mayer Brown LLP is acting as legal counsel to the placement
agents.
Investor Conference Call Information
Cipher Mining and Good Works will host a joint investor call to
discuss the proposed transaction and review an investor
presentation today, March 5, 2021. An audio webcast of the call
will be available on
www.netroadshow.com/nrs/home/#!/?show=d8a8c0cd.
To access the audio replay, go to
https://www.ciphermining.com/investors.html
Additional information about the proposed transaction, including
a copy of the agreement and plan of merger and investor
presentation, will be provided in a Current Report on Form 8-K to
be filed by Good Works prior to the call, and will be available
free of charge on the SEC website at www.sec.gov.
Additional Information about the Business Combination and
Where to Find It
In connection with the proposed transaction, Cipher Mining will
become the wholly-owned subsidiary of Good Works and Good Works
will be renamed Cipher Mining Inc. as of the closing of the
proposed transaction. Good Works is expected to file a registration
statement on Form S-4 (the “Form S-4”) with the SEC that will
include a proxy statement and prospectus of Good Works and an
information statement of Cipher Mining. Good Works and Cipher
Mining urge investors, stockholders and other interested persons to
read, when available, the Form S-4, including the preliminary proxy
statement/prospectus and amendments thereto and the definitive
proxy statement/prospectus and documents incorporated by reference
therein, as well as other documents filed with the SEC in
connection with the proposed transaction, as these materials will
contain important information about Cipher Mining, Good Works and
the proposed transaction. Such persons can also read Good Works’
Annual Report on Form 10-K for the fiscal year ended December 31,
2020, for a description of the security holdings of Good Works’
officers and directors and their respective interests as security
holders in the consummation of the proposed transaction. When
available, the definitive proxy statement/prospectus will be mailed
to Good Works’ stockholders. Stockholders will also be able to
obtain copies of such documents and all other relevant documents
filed or that will be filed with the SEC by Good Works, without
charge, once available, at the SEC’s website at www.sec.gov, or by
directing a request to: Good Works Acquisition Corp. 4265 San
Felipe, Suite 603, Houston, TX 77027, attention: Cary Grossman.
Before making any voting decision, investors and security
holders of Good Works and Cipher Mining are urged to read the
registration statement, the proxy statement/information
statement/prospectus and all other relevant documents filed or that
will be filed with the SEC in connection with the proposed business
combination as they become available because they will contain
important information about the proposed business
combination.
Participants in the Solicitation
Good Works, Cipher Mining and their respective directors,
executive officers and other members of their management and
employees, under SEC rules, may be deemed to be participants in the
solicitation of proxies of Good Works’ stockholders in connection
with the proposed transaction. Investors and security holders may
obtain more detailed information regarding the names, affiliations
and interests of Good Works’ directors and executive officers in
Good Works’ Annual Report on Form 10-K for the fiscal year ended
December 31, 2020, which was filed with the SEC on February 17,
2021. Information regarding the persons who may, under SEC rules,
be deemed participants in the solicitation of proxies of Good
Works’ stockholders in connection with the proposed transaction
will be set forth in the proxy statement/prospectus for the
proposed transaction when available. Information concerning the
interests of Good Works’ participants in the solicitation, which
may, in some cases, be different than those of Good Works
Acquisition Corp.’s equity holders generally, will be set forth in
the proxy statement/prospectus relating to the proposed transaction
when it becomes available.
About Cipher
Cipher will be established as an industrial-scale Bitcoin mining
company dedicated to expanding and strengthening the Bitcoin
network’s critical infrastructure. Our goal is to be the leading
Bitcoin mining company in the United States. We expect that the
operations at our four initial planned data centers in Ohio and
Texas will enable the Bitcoin network to continue to operate and
flourish. Through our business model, Cipher expects to operate
powerful computers that mine Bitcoin and validate transactions on
the Bitcoin network. We believe Cipher will leverage our
best-in-class technology, market-leading power purchase
arrangements, and a seasoned, dedicated senior management team to
become the market leader in Bitcoin mining.
About Good Works
Good Works is a blank check company organized for the purpose of
effecting a merger, share exchange, asset acquisition, stock
purchase, recapitalization, reorganization, or other similar
business combination with one or more businesses or entities. The
Good Works name reflects the fact that its management and directors
donated half of their founder shares to charitable organizations in
light of the impact that COVID-19 has had on the ability of
non-profits to generate contributions and revenues. The Company’s
management team consists of Messrs. Fred Zeidman, CEO and
Co-Chairman, Douglas Wurth, Co-Chairman, and Cary Grossman,
President. I-B Good Works, LLC, an affiliate of I-Bankers
Securities is the sponsor of Good Works. Good Works is a
publicly-traded special purpose acquisition company, or SPAC, with
approximately $170 million in trust. Management of Good Works has
deep experience in private equity investing, corporate finance and
executive level management in a number of industries. In addition,
they have experience in Bitcoin mining through involvement in a
Power Hosting Company and have extensive experience in SPAC mergers
and board governance of public and private companies.
Forward Looking Statements
This document contains certain forward-looking statements
within the meaning of the federal securities laws with respect to
the proposed business combination between Good Works and Cipher
Mining, including statements regarding the benefits of the proposed
business combination, the anticipated timing of the proposed
business combination, the services offered by Cipher Mining and the
markets in which Cipher Mining operates, business strategies, debt
levels, industry environment, potential growth opportunities, the
effects of regulations and Good Works’ or Cipher Mining’s projected
future results. These forward-looking statements generally are
identified by the words “believe,” “project,” “expect,”
“anticipate,” “estimate,” “intend,” “strategy,” “future,”
“forecast,” “opportunity,” “plan,” “may,” “should,” “will,”
“would,” “will be,” “will continue,” “will likely result,”
“positions,” “enables” and similar expressions (including the
negative versions of such words or expressions).
Forward-looking statements are predictions, projections and
other statements about future events that are based on current
expectations and assumptions and, as a result, are subject to risks
and uncertainties. Many factors could cause actual future events to
differ materially from the forward-looking statements in this
document, including but not limited to: (i) the risk that the
proposed business combination may not be completed in a timely
manner or at all, which may adversely affect the price of Good
Works’ securities; (ii) the risk that the proposed business
combination may not be completed by Good Works’ business
combination deadline and the potential failure to obtain an
extension of the business combination deadline if sought by Good
Works; (iii) the failure to satisfy the conditions to the
consummation of the proposed business combination, including the
approval of the proposed business combination by the stockholders
of Good Works, the satisfaction of the minimum trust account amount
following redemptions by Good Works’ public stockholders and the
receipt of certain governmental and regulatory approvals; (iv) the
effect of the announcement or pendency of the proposed business
combination on Cipher Mining’s business relationships, performance,
and business generally; (v) risks that the proposed business
combination disrupts current plans of Cipher Mining and potential
difficulties in Cipher Mining employee retention as a result of the
proposed business combination; (vi) the outcome of any legal
proceedings that may be instituted against Good Works or Cipher
Mining related to the agreement and plan of merger or the proposed
business combination; (vii) the ability to maintain the listing of
Good Works’ securities on the NASDAQ; (viii) the price of Good
Works’ securities, including volatility resulting from changes in
the competitive and highly regulated industries in which Cipher
Mining plans to operate, variations in performance across
competitors, changes in laws and regulations affecting Cipher
Mining’s business and changes in the combined capital structure;
and (ix) the ability to implement business plans, forecasts, and
other expectations after the completion of the proposed business
combination, and identify and realize additional opportunities. The
foregoing list of factors is not exhaustive. You should carefully
consider the foregoing factors and the other risks and
uncertainties described in Good Works’ final proxy
statement/information statement/prospectus contained in the Form
S-4 registration statement described below, including those under
“Risk Factors” therein, the Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and other documents filed by Good Works from
time to time with the U.S. Securities and Exchange Commission (the
“SEC”). These filings identify and address other important
risks and uncertainties that could cause actual events and results
to differ materially from those contained in the forward-looking
statements. Forward-looking statements speak only as of the date
they are made. Readers are cautioned not to put undue reliance on
forward-looking statements, and Good Works and Cipher Mining assume
no obligation and, except as required by law, do not intend to
update or revise these forward-looking statements, whether as a
result of new information, future events, or otherwise. Neither
Good Works nor Cipher Mining gives any assurance that either Good
Works or Cipher Mining will achieve its expectations.
Non-Solicitation
This press release is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the potential transaction and shall not constitute an
offer to sell or a solicitation of an offer to buy the securities
of Good Works, Cipher Mining or the combined company, nor shall
there be any sale of any such securities in any state or
jurisdiction in which such offer, solicitation, or sale would be
unlawful prior to registration or qualification under the
securities laws of such state or jurisdiction. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of the Securities Act.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210305005234/en/
Good Works Acquisition Corp.: Contact: Cary Grossman
713-204-3873 cgrossman@shorelinecapitaladvisors.com
Cipher Mining Mark Roberts Blueshirt Capital Advisors
investors@ciphermining.com
Cipher Mining Media Contact: Ryan Dicovitsky Dukas Linden
Public Relations 908-907-7703 CipherMining@DLPR.com
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