Marathon Digital Holdings, Inc. has announced its definitive agreement to acquire a 200-megawatt bitcoin mining data center in Garden City, Texas. The purchase price for this acquisition is $87.3 million, which translates to approximately $437,000 per megawatt. This marks Marathon's second major acquisition of data centers dedicated to bitcoin mining in the last four months.
Before this acquisition, Marathon's bitcoin mining portfolio consisted of 584 megawatts, 3% of which resided on sites directly owned and operated by the company. Following the close of this acquisition and the expected expansion of the site in 2024, Marathon will have increased the number of megawatts in its mining portfolio to 1.1 gigawatts, with 54% of this capacity residing on sites directly owned and operated by the company.
The bitcoin mining data center in Garden City, Texas is located adjacent to a wind farm and predominantly uses renewable energy. It was constructed and energized in 2023 and currently supports a workforce of approximately 25 employees.
By acquiring this data center, Marathon will take direct ownership of its current on-site operations and gain an additional 100 megawatts of capacity in which to expand, 32 megawatts of which are expected to be available as of the closing date. Marathon expects to expand its presence at the site in 2024 by an additional 100 megawatts to accommodate a total of 200 megawatts of capacity dedicated exclusively to its bitcoin mining operations.
The acquisition is also expected to reduce the cost per coin of Marathon’s current operations at the site by approximately 20%. The transaction is subject to customary closing conditions and is anticipated to close in the second quarter of 2024.
Fred Thiel, Marathon’s Chairman and CEO, emphasized that the transaction increases their influence over their current operations, reduces the cost per coin by approximately 20% at the site, and provides them with an additional 100 megawatts of capacity in which to expand. As a result of this acquisition, Marathon will directly own and operate more megawatts than it had in its entire bitcoin mining portfolio in December 2023.
The legal advisor to Marathon in connection with the transaction is Paul, Weiss, Rifkind, Wharton & Garrison LLP, while Lowenstein Sandler LLP is serving as the legal advisor to Applied Digital.
This acquisition represents an important milestone for Marathon Digital Holdings as it continues to expand its bitcoin mining portfolio and increase its influence over its mining operations. The market has reacted to these announcements by moving the company's shares -1.8% to a price of $18.98. For the full picture, make sure to review Marathon Digital's 8-K report.
