Benzinga | Dec 1, 2021 09:22AM EST

Riot Blockchain Acquires ESS Metron For ~$50M

Riot Blockchain, Inc. (NASDAQ:RIOT) ("Riot", "Riot Blockchain" or the "Company") today announced that it has acquired Ferrie Franzmann Industries, LLC (d/b/a ESS Metron) ("ESS Metron"). The total consideration payable in the transaction is valued at approximately $50 million, consisting of up to 715,413 shares of Riot common stock and $25 million in cash, funded with cash on the balance sheet.

* ESS Metron is a leader with over sixty years of experience in designing and producing highly engineered electrical equipment solutions, many of which are mission-critical to successfully deploying Bitcoin mining operations at scale.

* Acquisition assists in ensuring Riot's timely miner installations by de-risking procurement of mission-critical infrastructure.

* Acquisition enhances Riot's competitive position across the electrical supply chain, as ESS Metron is also a leading supplier to numerous third-party clients.

* Transaction valued at approximately $50 million, $25 million payable in cash, and remainder in issuance of up to 715,413 shares of Riot's common stock.

The acquisition of ESS Metron, currently a key supplier to Riot's Whinstone facility, is highly complementary to Riot and its ongoing infrastructure expansion to 700 MW. ESS Metron provides highly engineered, custom product offerings mission-critical to Bitcoin mining infrastructure and significantly improves Riot's ability to improve its internal engineering capabilities. ESS Metron's engineering proficiency has been a critical component in developing Riot's customized immersion-cooling technology for its previously announced 200 MW immersion-cooling expansion project.

"The successful acquisition of ESS Metron marks yet another milestone in establishing Riot as a leader in Bitcoin mining," said Jason Les, CEO of Riot. "Riot's strategic position across the electrical supply chain is significantly enhanced as the Company will benefit from ESS Metron's existing relationships with leading electrical suppliers globally. In addition, Riot will continue its fast-tracked expansion project as the Company benefits from internalizing ESS Metron's engineering and industry expertise. We are thrilled to welcome the talented ESS Metron team to the Riot family and look forward to growing our future together."

"We are excited to continue the growth of ESS Metron's business by joining Riot Blockchain," said Stephen Howell, newly promoted CEO of ESS Metron. "We look forward to continuing to provide best-in-class service to our growing customer base and actively collaborating with Riot in its ongoing expansion efforts."

ESS Metron is expected to continue to operate as an independent subsidiary of Riot, with the entire employee team being retained. Riot and ESS Metron look forward to continuing the long-term relationships built over decades with ESS Metron's customers and suppliers. ESS Metron is based in Denver, Colorado, operating from facilities totaling approximately 121,000 square feet. The facilities are subject to long-term lease agreements.

XMS Capital Partners, LLC served as an exclusive financial advisor and Sidley Austin LLP served as legal advisor to Riot. Davis Graham & Stubbs LLP served as legal advisor to ESS Metron.