Northern Data to acquire Bitfield, adding around 33,000 ASIC miners

German company Northern Data has agreed to acquire Bitfield, a mining firm, in a deal that will secure at least an 86% stake and indirectly gain about 33,000 ASIC miners.

According to press release, 6,600 devices are already installed and operating in Northern Data’s data centres.

Deployment of the 26,000 additional miners already on hand is expected to be completed by the end of the first quarter of 2022, largely at sites in North America.

At the time of the deal, Bitfield’s hashrate was about 0.7 EH/s. After commissioning, the figure will be roughly 3 EH/s.

Computing capacity under Northern Data’s management, including hosting clients, will reach approximately 6 EH/s.

The deal is structured as an exchange of shares worth €400 million and contemplates the issue of up to 5.1 million Northern Data shares.

The German firm’s business includes hosting services for mining equipment, its own Bitcoin and altcoin mining operations, and cloud computing.

It is expected that the Bitfield acquisition will support vertical integration and value creation in mining, aligned with its ESG (ESG).

“The company intends to use the free cash flow generated by the deal to invest in further growth. This will include increasing the number of ASIC miners and GPU-server systems, expanding data centre infrastructure and creating new facilities,” the press release states.

The management expects 2021 revenue of €180-€220 million and pre-tax profit of €100-€125 million.

In 2019, Northern Data acquired the American company Whinstone US, which was building a Texas data centre for Bitcoin mining with a capacity of 1 GW. One of its early residents was SBI Holdings’ subsidiary mining operation.

As reported in October 2020, Arcane Research found that Chinese miners’ dominance was gradually decreasing due to growth in computing power in other countries, including the United States.

In May 2021, Chinese authorities announced that they intended to take measures against the industry. In the following month, governments in several regions ordered miners to cease operations.

Researchers from the Cambridge Centre for Alternative Finance found that the share of Chinese miners in the hash rate had fallen below 50% as early as March 2021, prior to the crackdown on the industry.

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