Applied Digital Sells 200MW Campus to Marathon for $87.3M

By Bobby Samwell • Friday, March 15 10:18 • Permanent Link

Applied Digital Corporation (NASDAQ: APLD) has recently announced the sale of its 200-megawatt ("MW") campus in Garden City, TX to Marathon Digital Holdings (NASDAQ: MARA) for a net purchase price of approximately $87.3 million. The gross purchase price is specified to be $97.3 million after adjustments contemplated in the purchase agreement. This transaction will also release $12 million of restricted cash previously committed as collateral for the site's letter of credit.

Applied Digital's Garden City campus, completed in 2023, has been providing hosting agreements for blockchain mining clients, including Marathon, under third-party arrangements. It's important to note that the company exclusively focuses on infrastructure and support services and does not currently own any equipment placed in the facility. Marathon, a significant customer at the Garden City campus, has been operating under a multi-year colocation hosting agreement and is expected to remain a customer at Applied Digital's North Dakota blockchain hosting facilities. Marathon Digital Holdings is a digital asset technology company focusing on supporting and securing the Bitcoin ecosystem.

The sale of the Garden City campus reflects Applied Digital's strategy to focus on strategic high-performance computing ("HPC") sites in North Dakota, redirecting resources and strengthening the company's balance sheet. This divestiture represents a purposeful pivot, allowing the company to allocate financial and operational resources toward strategic sites in North Dakota, reinforcing its groundwork for enduring growth and operational excellence.

Wes Cummins, CEO and Chairman of Applied Digital, stated, "This strategic transaction represents a purposeful pivot, equipping the company to allocate financial and operational resources toward strategic sites in North Dakota, as well as bolstering our balance sheet strength." He also mentioned, "With a focused emphasis on the building of our HPC data centers, we reinforce our groundwork for enduring growth and operational excellence."

Fred Thiel, Marathon's Chairman and CEO, expressed confidence in the mutually beneficial transaction, stating, "As we anticipate the finalization of this mutually beneficial transaction, we are confident it will enable both companies to advance our long-term strategies with greater efficacy, fostering a path towards continued success."

Following this divestiture, Applied Digital (NASDAQ: APLD) continues to focus on designing, developing, and operating next-generation data centers across North America to provide digital infrastructure solutions to the rapidly growing HPC industry.

Today the company's shares have moved 3.8% to a price of $4.39. For the full picture, make sure to review Applied Digital's 8-K report.

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