Core Scientific to go public via SPAC merger

The American blockchain-hosting provider Core Scientific will become a public company through a reverse merger with SPAC Power & Digital Infrastructure Acquisition Corp. (XPDI). Under the terms of the deal, its value is estimated at about $4.3 billion.

Today we announced that we have entered into an agreement and plan of merger with $XPDI which will result in @Core_Scientific becoming a publicly traded company on @Nasdaq: https://t.co/CoswIXwCoF

— Core Scientific (@Core_Scientific) July 21, 2021

XPDI shares trade on the Nasdaq stock market. The SPAC’s anchor investor is the largest asset-management company BlackRock.

According to the press release, the deal will bring Core Scientific about $300 million in revenue. The funds will be used to purchase mining equipment and construct new infrastructure facilities.

The blockchain-hosting provider stressed that it intends to continue expanding its business while maintaining ‘100% carbon neutrality’.

Under the terms of the agreement, Core Scientific shareholders will receive approximately 89% of the shares of the combined entity. The remaining securities will be allocated among XPDI’s public shareholders (8%) and its sponsors (2%). It is expected that the merger will be completed in the fourth quarter of 2021.

The company’s estimated value is 8.8 times its projected 2021 revenue ($493 million). For comparison: rival firms Riot Blockchain and Marathon Digital have market capitalizations of $2.45 billion and $2.5 billion respectively.

In the second quarter of 2021 Core Scientific mined 928 BTC, and 1,683 BTC in the first half of the year. In an interview with CNBC, Chief Executive Michael Levitt noted that over the last six months the provider’s platforms generated more than 3,000 BTC — part of the output was attributed to its clients.

The CEO said that around 80,000 ASIC miners were installed at the company’s facilities. By the end of 2022 they expect to reach 300,000.

Core Scientific also announced the forthcoming acquisition of the Bitcoin mining company Blockcap. The latter was founded by Core Scientific co-founder Darin Feinstein. The parties did not disclose details of the deal.

In April 2021, Core Scientific signed an agreement with the Chinese mining equipment manufacturer Bitmain to purchase 112,800 Bitcoin mining devices.

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