Digital asset miner Hut 8 Mining Corp. is purchasing five data centres totalling over 36,000 square feet of space from TeraGo Network Inc. for $30 million.
The transaction is expected close before the end of Q1 2022, after which Hut 8 (HUT-T) says it will retain all 30 data centre employees. The centres stretch from Vancouver to Toronto. The existing saleable power capacity totals 4.1 megawatts, with a further 1.5 megawatts of expansion capacity available within existing shelf space in the Kelowna location.
“As a team of Bitcoin and blockchain bulls, we are thrilled with the transformative growth opportunity this investment provides Hut 8,” said Hut 8 CEO Jaime Leverton in the announcement. “The acquisition of this complementary business diversifies Hut 8’s operations with a discrete, steady cash flow, that is uncorrelated to digital asset mining.
“This acquisition also puts us at the forefront of the accelerated digitization of industry, establishing us as the bridge between traditional and nascent iterations of high-performance computing.”
Stifel GMP acted as financial advisor to Hut 8 and Fasken Martineau DuMoulin LLP acted as its legal advisors.
Benefits to Hut 8
Aside from the employees, the sale also comes with a platform consisting of approximately 400 commercial customers, across a variety of industry verticals including gaming, visual effects and government agencies. According to Hut 8, this makes it the only “digital asset miner with enterprise-grade data centre capabilities.”
Under the agreement, Hut 8 is acquiring TeraGo’s cloud and colocation customers, employees, certain other contracts, intellectual property rights and other assets related to its cloud and colocation business lines.
Senior executives and employees who are a part of TeraGo’s fixed wireless access and 5G lines will remain with the firm. TeraGo will also provide transition services over the next several months.
Hut 8 also noted the acquisition “provides access to operating sites which are connected to electrical grids powered by significant renewables and emissions-free resources.”
“TeraGo is uniquely positioned in Canada with our broad customer base for wireless services and our extensive millimeter wave spectrum licenses; this transaction will enable us to focus on leveraging these assets in our move to become Canada’s leading provider of mmWave 5G private networks for businesses,” said TeraGo’s CEO Matthew Gerber in a separate release.
Hut 8 was founded in 2018 and is headquartered in Toronto. It has two sites in Alberta and a third in North Bay, Ont.
As of Dec. 31, Hut 8 held 5,518 self-mined Bitcoin in reserve, claiming it holds “more self-mined Bitcoin than any crypto miner or publicly traded company globally.”
The company was the first publicly traded miner on the TSX and the first Canadian miner to be listed on The Nasdaq Global Select Market.
Earlier this month, it became the first digital asset mining company to join Business Renewables Centre Canada, a non-profit aimed at accelerating the uptake of renewable energy in Canada.
The mining of digital assets is an energy-intensive industry.
According to the Cambridge Bitcoin Electricity Consumption Index, Canada’s average monthly hashrate share (the amount of computational power used by miners for minting Bitcoins) globally was 9.55 per cent.
At the end of December, the global Bitcoin electricity consumption for the month was 10.29 terawatt-hours (TWh) and in total, 299.13 TWh.
TeraGo, also headquartered in Toronto, manages over 3,000 cloud workloads, operates five data centres in the GTA, the Greater Vancouver Area and Kelowna, and owns and manages its own IP network.
The company serves business customers in major markets across Canada including Toronto, Montreal, Calgary, Edmonton, Vancouver, Ottawa and Winnipeg.