HyperBlock acquires CryptoGlobal, creates cryptocurrency mining mammoth
HyperBlock has acquired CryptoGlobal, giving the firm control of cryptocurrency mining stock including thousands of mining rigs.
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The deal, announced earlier this week, will see HyperBlock acquire all issued and outstanding shares of CryptoGlobal.
It is hoped the merger will be completed quickly, with an anticipated date of the end of May 2018. Once complete, the companies plan to operate together under the name HyperBlock Technologies Corp.
The deal has been unanimously approved by the CryptoGlobal board of directors.
Under the terms of the agreement, HyperBlock will issue 0.4229 of a common share of HyperBlock for each CryptoGlobal common share, valuing each CryptoGlobal common share at $0.74, a 48 percent premium on the closing price of CryptoGlobal shares at $0.50 on 29 March 2018.
The agreement is worth approximately $106 million.
Toronto, Canada-based HyperBlock offers a range of cryptocurrency-related services, including Mining-as-a Service (MAAS), self-mining, server hosting, and server hardware sales.
CryptoGlobal is another Canadian mining equipment and services company which currently focuses on mining Bitcoin, DASH, Ether, and Litecoin.
HyperBlock founder Sean Walsh will become the CEO of the combined company, while CryptoGlobal co-founders Rob Segal and James Millership, alongside Blockchain Dynamics Founder Chris McGarrigle, will join the management team.
"Combining HyperBlock's large-scale Mining-as-a-Service model with CryptoGlobal's existing mining, custodial storage, and crypto trading businesses, creates a strong foundation for both organic growth and growth through acquisition," said Walsh. "We are poised to become a global leader and consolidator in cryptocurrency mining and asset management."
The combined company will operate over 21,000 mining servers and will utilize 28 MW of power to mine cryptocurrencies in the US and Canada. According to HyperBlock, there is potential to extend to over 90 MW in the future.
HyperBlock Technologies will offer MAAS, server hosting, self-mining, server sales, cryptocurrency storage and trading, as well as a "SaaS-based cryptocurrency insights platform."
Due to the acquisition, CryptoGlobal has canceled a $15 million debt financing agreement, previously announced in March.
In addition, the company has extended the due diligence period for its agreement to acquire BitCity to 30 April 2018.
See also: Japan punishes Coincheck after $530m cryptocurrency theft
CryptoGlobal's agreement to acquire BitCity includes a 100 MW, ten-year Power Purchase Agreement (PPA) and hosting deal to build out a 40,000 sq foot cryptocurrency mine in Ontario.
The deal is subject to regulatory approval.