NEW
YORK, Oct. 14, 2024 /PRNewswire/ -- Bit Digital,
Inc. (Nasdaq: BTBT) ("Bit Digital" or the "Company"), a sustainable
platform for digital assets and artificial intelligence ("AI")
infrastructure headquartered in New
York, announced today that it has acquired Enovum Data
Centers ("Enovum"), an owner, operator, and developer of
high-performance computing ("HPC") datacenters, for a total
consideration of approximately CAD $62.8
million (approximately USD $46MM). This transaction
vertically integrates Bit Digital's HPC operations with an
existing, fully operational and fully leased Tier 3 datacenter in a
major city; provides a strong diversity of existing and prospective
colocation customers; delivers a strong pipeline of expansion site
opportunities and an experienced team to lead the development
processes; and enables Bit Digital to offer new service offerings
such as colocation and on-demand computing to complement its
existing GPU offerings.
Transaction Overview: Bit Digital has acquired Enovum for
a total consideration of CAD $62.8MM
(approximately USD $46MM based on a CAD/USD exchange rate of 0.73).
The acquisition was completed on a debt-free, cash-free basis, with
a normalized level of working capital acquired, funded by
approximately CAD $56 million of cash
and approximately 1.62 million share equivalents issued solely to
key management who rolled-over a significant portion of their
existing ownership in Enovum. The transaction closed on
October 11, 2024.
Strategic Rationale: The addition of Enovum
vertically integrates Bit Digital's HPC business into the
colocation services sector of the value chain. This creates the
potential for significant synergies, as Bit Digital may capture
additional margin from HPC customers, versus hosting them with
third party datacenters. Additionally, it enhances Bit Digital's
competitive positioning in the marketplace, enabling the Company to
offer an integrated GPU cloud solution to customers. Finally, Bit
Digital will enjoy greater operating flexibility by colocating its
owned GPU inventory in Enovum datacenters, offering capacity to
customers on a just-in-time basis – an important differentiator in
a marketplace where time-to-market is paramount.
Expansion Pipeline: Enovum has a proprietary development
pipeline of 288 MW, including 93MW that are
currently under LOI with respective landlords. All sites are
in major metropolitan areas and in general will be designed to
accommodate direct-to-chip liquid cooling. Immediate term plans
include bringing approximately 8MW online by the end of 2Q 2025 for
approximately USD $50MM of capex. The Company expects
run-rate, colocation EBITDA for the Enovum business to exit 2Q25 at
approximately USD $13MM based on that development schedule. Bit
Digital may also place its own GPUs at those sites, which could
significantly increase EBITDA per MW. The Company is tentatively
planning to bring an additional 20MW online by year-end 2025.
However, development plans will be contingent on firm customer
demand and financing options.
Financing Alternatives: Bit Digital has engaged an
investment banking firm to pursue debt financing alternatives to
expand Bit Digital's capital resources to fund both Enovum's
expansion capex, as well as procurement of GPU servers for Bit
Digital's existing cloud business. The Enovum acquisition has been
structured to optimize tax outcomes and provide for a potential
future REIT (Real Estate Investment Trust) election.
Enovum Overview: Enovum, headquartered in Montreal, Canada, is an owner, operator, and
developer of HPC datacenters that commenced operations in 2020.
Enovum currently operates a 4MW Tier 3 datacenter in Montreal that is powered by renewable
hydroelectricity. The site, which is leased through 2036 with two
five-year extension options, features 2N UPS and 2N generators with
N+1 redundant cooling design. The site is currently fully leased to
more than a dozen colocation customers and is expected to generate
approximately CAD $10MM of revenue in 2025. Enovum already has
strong demand from both existing and new customers for colocation
capacity in new capacity to be brought online.
Experienced Team: Bit Digital will retain key employees
from Enovum as part of its purchase agreement to ensure operational
continuity of the existing site and development of the expansion
pipeline. These employees possess decades of collective experience
in managing and developing Tier 3 data centers and fill a key gap
in Bit Digital's capabilities.
Management Commentary: Sam Tabar, Bit Digital's CEO,
commented: "We are thrilled to announce a transformational
acquisition for Bit Digital. This transaction is the culmination of
many months of due diligence and negotiation. Vertical integration
on the HPC side has been a priority for Bit Digital and we believe
we were able to achieve this goal at an attractive price. For a
similar cost to ground-up development, we acquired an operational
4MW facility and a key time value advantage vs. greenfield
development; a fully leased site already generating several million
dollars of EBITDA; a diverse set of existing customers and firm
book for future capacity; and a strong pipeline of future sites
with an experienced team to lead the development process."
Tabar continued: "One of our key criteria for acquiring an HPC
site was proximity to a major metropolitan area. The existing site
in Montreal and near-term
expansions sites are all located in Tier-1 cities. We continue to
see major value in having datacenter assets adjacent to highly
populous areas as they present the most value for inference models
where latency is a primary concern. Following this acquisition and
contemplating our expansion program, we believe Bit Digital will be
well positioned to accommodate inference workloads. In tandem with
the buildout of our datacenter footprint, we will continue to
invest in our GPU-as-a-service business, with the two units
coalescing to establish a formidable player in the HPC
industry."
Advisors: B. Riley Securities is acting as exclusive
financial advisor to Bit Digital, Inc. and Davies Ward Phillips
& Vineberg LLP and White & Case LLP are acting as legal
advisors.
Conference Call: The Company will host a conference call
to discuss the acquisition on Tuesday,
October 15th, 2024, at 9AM
ET. To register for the webcast, please click: here.
Additionally, participants can join the conference call by dialing
1- 800-289-0459 (passcode: 632269). An accompanying investor
presentation can be found on the investor relations page
bit-digital.com.
About Enovum
Enovum is a high-performance computing data center operator
headquartered in Montreal, Canada.
Enovum operates a Tier 3 datacenter in Montreal that currently has 4MW of capacity.
The company also has a pipeline of development sites of more than
280MW, including over 90MW currently under LOI. Enovum has an
experienced team that has proven to be able to build
state-of-the-art datacenters and source high-value customers to
fill that capacity.
About Bit Digital
Bit Digital, Inc. is a sustainable platform for digital assets
and artificial intelligence ("AI") infrastructure headquartered in
New York City. Our
bitcoin mining operations are located in the US,
Canada, and Iceland. The Company has established a
business line, Bit Digital AI, that offers infrastructure services
for artificial intelligence applications. For additional
information, please contact ir@bit-digital.com or visit our
website at www.bit-digital.com.
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 3.D of our most recent Annual Report
on Form 20-F for the fiscal year ended December 31, 2023. If any material risk was 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. Future changes in the
network-wide mining difficulty rate or bitcoin hash
rate may also materially affect the future performance of Bit
Digital's production of bitcoin. Actual operating
results will vary depending on many factors including network
difficulty rate, total hash rate of the network, the operations of
our facilities, the status of our miners, and other factors.
Safe Harbor Statement
This press release may contain certain "forward-looking
statements" relating to the business of Bit Digital, Inc., and its
subsidiary companies. All statements, other than statements of
historical fact included herein are "forward-looking statements."
These forward-looking statements are often identified by the use of
forward-looking terminology such as "believes," "expects," or
similar expressions, involving known and unknown risks and
uncertainties. Although the Company believes that the expectations
reflected in these forward-looking statements are reasonable, they
do involve assumptions, risks and uncertainties, and these
expectations may prove to be incorrect. Investors should not place
undue reliance on these forward-looking statements, which speak
only as of the date of this press release. The Company's actual
results could differ materially from those anticipated in these
forward-looking statements as a result of a variety of factors,
including those discussed in the Company's periodic reports that
are filed with the Securities and Exchange Commission and available
on its website at http://www.sec.gov. All forward-looking
statements attributable to the Company or persons acting on its
behalf are expressly qualified in their entirety by these factors.
Other than as required under the securities laws, the Company does
not assume a duty to update these forward-looking statements.
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SOURCE Bit Digital, Inc.