HIVE Blockchain acquires Quebec facility for $2.8M

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Hive Blockchain Technologies has expanded its digital currency processing capacity with its latest acquisition. The company announced that it had acquired a Canadian facility for C$4 million ($2.8 million) in cash and stocks. The facility has access to low cost green energy and is a strategic acquisition for HIVE as it seeks to expand its footprint in the transaction processing industry.

HIVE, which is listed on the Toronto Stock Exchange, revealed that it had signed a definitive agreement to acquire the facility from Cryptologic Corp. in a press release. The 30-megawatt facility is located in Lachute, Quebec, and has access to some of the lowest cost electricity in the world. It currently has some 14,000 Bitmain S9 miners.

The acquisition will cost HIVE 15 million common shares at the price of $0.14 per share, with the remaining $700,000 being paid in cash. The deal is subject to regulatory approvals and is expected to close by April 3 or three days after the TSX grants conditional approval.

This marks HIVE’s first foray into BTC mining, with the company having focused on processing ETH. It operates a facility in Sweden that houses the majority of its GPU machines, with a smaller facility in Iceland. With the acquisition, the firm will now more than double its total available power capacity to over 50 MW.

The company’s Interim Executive Chairman Frank Holmes explained the significance of the acquisition, “This is an important strategic acquisition for HIVE that diversifies our business significantly, and we are making it at an opportune time at an attractive valuation for our shareholders. The Acquisition provides us with an advanced, operating Bitcoin mining facility ready to transition to next generation mining hardware with access to some of the lowest cost electricity on the planet. The cost of US$95,000 per MW is less than half the industry standard build cost per MW.”

The acquisition gives the firm a better capacity to expand its future operations. This is in line with its recent moves that have sought to give it greater control of its operations. It recently gained full control of its operations in Sweden, where it plans on expanding by at least 20% in the next two quarters. HIVE also suspended its cloud mining operations. According to Holmes, all these moves are consistent with the firm’s focus to “strengthen our operational control of HIVE including improving transparency, accountability and financial controls, and improving our operational efficiency including optimizing our cost structure to set the foundations for profitable growth.”

A week ago, HIVE issued a cease-and-desist order to Hive.io, a new blockchain that was born after the Steem blockchain split recently. The new chain has led to confusion, with some believing that it had an affiliation with HIVE. The company accused the new blockchain of attempting to pass off on the goodwill that it has taken years to cultivate.