Bit Digital, Inc. (NASDAQ: BTBT) has acquired the Enovum Data Centers for USD$46 million, expanding beyond Bitcoin mining into the high-performance computing (HPC) sector.
Announced on Monday, the move enhances the company’s capabilities in colocation and on-demand computing services.
The acquisition includes a Tier 3 HPC datacenter company, which not only adds to Bit Digital’s infrastructure but also includes an expansion pipeline of over 280 megawatts in major metropolitan areas. This strategic integration aims to bolster Bit Digital’s offering by providing integrated GPU cloud solutions, thereby increasing operational flexibility and market competitiveness.
This development comes as part of Bit Digital’s broader strategy to diversify and strengthen its market position beyond its established reputation in bitcoin mining. Bit Digital is taking advantage of the growing demand for AI and computational services by getting into HPC. It’s also using its expertise in managing high-density computing environments.
“This transaction is the culmination of many months of due diligence and negotiation,” said Sam Tabar, Bit Digital’s CEO.
”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.”
Tabar said his company secured a functioning 4MW facility, gaining a crucial time advantage over greenfield projects. The site is fully leased with a diverse customer base, confirmed future capacity, and a strong pipeline of upcoming sites.
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Acquisition gives Bit Digital’s portfolio a boost
Enovum, based in Montreal, Canada, is an owner, operator, and developer of HPC datacenters that began operations in 2020. The company currently runs a 4MW Tier 3 datacenter in Montreal, powered by renewable hydroelectricity.
Enovum has a proprietary development pipeline of 288 MW with respective landlords. The company has organized all of its sites in major metropolitan areas. They are also generally designed to accommodate direct-to-chip liquid cooling.
This acquisition gives Bit Digital’s portfolio a needed boost, and also secures a more stable revenue stream, potentially reducing its dependency on the fluctuating fortunes of bitcoin mining.
The company plans to bring approximately 8 MW online by the end of the second quarter of 2025. The company’s estimated capital expenditure of USD$50 million. By that time, Enovum expects to reach a run-rate colocation EBITDA of around USD$13 million, based on its development schedule.
Bit Digital may also install its own GPUs at these sites, which could significantly boost EBITDA per MW. An additional 20 MW is tentatively planned to come online by the end of 2025, depending on demand and financing.
Bit Digital has engaged an investment banking firm to explore debt financing options in support of this expansion. This would increase Bit Digital’s capital resources for both Enovum’s expansion expenses and to buy GPU servers for Bit Digital’s cloud business. The two companies structured the Enovum acquisition to optimize tax outcomes, with potential consideration for a future Real Estate Investment Trust election.
The company has leased the site through 2036 with two five-year extension options and features various high tech generators. It’s presently leasing space and service out to over a dozen colocation customers. The anticipated amount of revenue for which is CAD$20 million in 2025.
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joseph@mugglehead.com
