Genesis will receive 4,666,667 shares at C$1.50 for a total of C$7,000,000. The deal, announced today via press release, is set to close on October 11, 2017, following approval from TSX Exchange. The two firms share an exclusive arrangement on blockchain mining cashflows and rights.
Hive intends to expand hash capacity by constructing four additional data centers in Iceland and Sweden. The publicly listed company describes itself as a bridge for traditional capital markets to the blockchain sector. The company's acquisition deal has been in the pipeline since earlier this year.
"We welcome the financial support of Genesis Mining, the leading cryptocurrency mining hash power provider with over a million customers, in addition to the invaluable expertise they are already providing,"
commented Harry Pokrandt, President, CEO and a Director at HIVE.
"Genesis shares our vision to rapidly develop HIVE into a major player in the cryptocurrency mining space, leveraging traditional capital markets."
The purchase, completed as a non-brokered private placement, was conveniently set up as a reverse merger to benefit from Hive's TSX Exchange listing. Genesis Mining Ltd now owns 30% of its holdings. A master service agreement sets out terms for Genesis to operate Hive's facility on their behalf for a fixed fee. As per the company's latest financials (pdf), Hive is a strategic partnership between Fiore Group and Genesis Mining.
The publicly traded company has direct access to cash flows from facility and blockchain assets through ownership. Meanwhile, Genesis can tap into the exchange's vast capital base.
As at press time, Hive listed stock was trading 15% higher after the announcement.
Genesis Mining is a veteran in cryptocurrency mining, in business since 2014. Most of its mining operations were based out of Bosnia and China but have since moved most to Reykjanes, Iceland. On its platform, clients access to mining hardware through rental contracts. Cloud miners generate Dash, Zcash, Bitcoin, Monero, and Ethereum. Genesis' long history dates back to mining Ethereum with custom hardware back when ETH was trading at just $3.
Marco Streng, Co-Founder of Genesis Group commented:
"We strongly believe in the success of HIVE and think there is a lot of growth potential from where we are now,"
Mining has experienced incredible fortunes have prices of cryptocurrencies soared in the last 12 months. Stock prices of chips such as AMD went up driven by a surge in demand for mining hardware.
Hive fills a critical gap in equity markets by offering a listed blockchain infrastructure company. Investors can now get exposure to the burgeoning cryptocurrency industry through familiar investment vehicles. Hive shareholders access both cash flows from mining business and price growth of crypto assets generated from the facilities.