Rumble Eyes 11.7 Billion Dollar Acquisition of Northern Data for Cloud Expansion

Rumble, a prominent video platform and cloud service provider, is considering acquiring Northern Data, a German data center company, in a deal valued at approximately 11.7 billion dollars. The proposed acquisition involves an all-stock transaction, where each share of Northern Data would be exchanged for 2.319 newly issued shares of Rumble. This valuation translates to approximately 18.27 dollars per share of Northern Data, which is a significant discount compared to its recent trading price of 26.81 dollars per share. Upon completion of the transaction, Northern Data shareholders would own approximately one-third of the combined company's shares.

This strategic move is part of Rumble's broader initiative to expand its cloud infrastructure and enhance its data center capabilities, particularly in the realm of artificial intelligence (AI) and high-performance computing. The acquisition of Northern Data would provide Rumble with a robust data center infrastructure, enabling it to better support its growing user base and expand its services. Northern Data's expertise in AI and high-performance computing aligns well with Rumble's goals to innovate and stay competitive in the rapidly evolving tech landscape. The deal, if finalized, would position Rumble as a major player in the global data center market, with a significant presence in Europe.

The proposed acquisition underscores Rumble's commitment to investing in cutting-edge technology and infrastructure. By acquiring Northern Data, Rumble aims to leverage its advanced data center capabilities to offer more efficient and scalable cloud services. This move is expected to strengthen Rumble's position in the market and attract more users and partners seeking reliable and high-performance cloud solutions. The acquisition is subject to regulatory approvals and other customary closing conditions. Both companies have expressed optimism about the potential benefits of the deal, highlighting the strategic fit and the opportunities it presents for growth and innovation. The transaction, if completed, would mark a significant milestone for Rumble as it continues to expand its global footprint and enhance its technological capabilities.

Northern Data, initially a cryptocurrency mining company, has since transitioned to providing services to enterprises developing AI tools, capitalizing on the high demand for computational power in this sector. Rumble, which went public in 2022, has recently entered the cloud market, aiming to compete in an industry dominated by well-funded Silicon Valley giants. The company launched cloud services for other enterprises last year. The transaction assumes that Northern Data will complete the sale of its cryptocurrency mining business. Northern Data has signed a non-binding agreement with Elektron Energy LP to sell its Bitcoin mining division.

Tether, a privately held digital asset company and the controlling shareholder of both companies, supports the transaction. Tether invested in Northern Data at the beginning of last year and acquired a stake in Rumble in February of this year. The combined market value of the two companies, based on their latest valuations, would result in a company worth approximately 45 billion dollars. However, this valuation is significantly lower than the 160 billion dollars that Northern Data sought for its merged AI cloud and data center businesses during its IPO in the United States last year. The company had previously discussed going public with advisors for its Taiga and Ardent businesses.