Riot Blockchain Acquires Rhodium for $185M, Boosts Self-Mining Capacity by 125MW

Riot Blockchain, Inc., a leading company in the Bitcoin mining sector, has completed a major acquisition through its subsidiary, Whinstone US, Inc. The deal involves the purchase of Rhodium Encore LLC for a total of $185 million. This acquisition is structured with $129.9 million in cash, a $6.1 million rebate on Rhodium’s power deposit, and $49 million in Riot shares, priced based on the volume-weighted average of the last ten trading days prior to the closing date.

As part of this strategic move, Rhodium will transfer all tangible assets, including ASIC miners, located at the Rockdale facility, and will vacate the premises within three business days post-closing. Upon completion of the transaction, Riot will utilize Rhodium’s 125 MW power capacity alongside its existing operational assets to enhance its self-mining capabilities. Both firms will also resolve all ongoing litigations and waive any future claims related to this transaction, simplifying their legal standings.

This acquisition represents a significant operational expansion for Riot. The 125 MW power capacity is the most strategically valuable component, as secured power access is often more critical than the mining hardware itself. The transaction's structure indicates Riot is consolidating operations at their Rockdale Facility, transitioning from a hybrid model where they allocated some capacity to hosting clients like Rhodium to a fully self-mining operation. This vertical integration gives Riot complete operational control and eliminates potential conflicts with hosting clients.

By acquiring Rhodium's ASIC miners alongside the power capacity, Riot gains immediate hash rate without deployment delays typical when ordering new equipment. The 125 MW capacity could support roughly 37,500-41,500 latest-generation miners depending on efficiency. The "entire Rockdale Facility power load being allocated to self-use" indicates a strategic shift to maximize margin potential rather than the more predictable but lower-margin hosting business. This consolidation at an existing site also avoids the permitting, construction, and ramp-up challenges of greenfield expansion while immediately boosting Riot's operational scale in a capital-efficient manner.

Financially, the immediate assumption of 125 MW power capacity at Riot's existing Rockdale Facility should drive operational synergies through consolidated management, shared infrastructure, and the elimination of duplicate overhead costs. The transaction transforms Riot from a partial landlord at Rockdale to a full operator, aligning with their vertically integrated business model and potentially improving facility-level margins.

Beyond the asset acquisition, the settlement of all existing litigation creates substantial value by eliminating legal uncertainty, future legal expenses, and management distraction. The non-binding nature of the term sheet and the required bankruptcy court approval still present execution risk, but the mutual benefits suggest a path to completion. The structure of the deal, which combines cash, returned deposit, and equity, demonstrates a balanced approach to preserve liquidity while using equity as acquisition currency. The transaction's context within Rhodium's bankruptcy proceedings is significant, as Riot appears to be capitalizing on a distressed situation to acquire valuable mining infrastructure potentially below replacement cost. The 7% equity component of the deal, relative to Riot's market cap, represents moderate dilution to existing shareholders.