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Northern Data invests $430m to expand HPC and mining capabilities

Transaction involves a cash component in the amount of $230 million to be paid within 12 months as well as approximately $200.5 million in new shares.

By João Marques Lima

Co-founder and Editor, The Tech Capital

3 Mins

August 15, 2021 | 9:38 PM BST

Northern Data invests $430m to expand HPC and mining capabilities

Aroosh Thillainathan, founder and CEO of Northern Data AG. Source: Northern Data

HPC and Bitcoin mining business Northern Data AG (XETRA: NB2, ISIN: DE000A0SMU87) said it has agreed to purchase Decentric Europe BV from Block.one and will, as a result, acquire all of Decentric’s GPU hardware for EUR 365 million (US$430.52 million).

The transaction includes approximately 223,000 GPU cards produced by AMD and Nvidia, which are installed in more than 24,000 server systems of GIGABYTE Technology.

The transaction involves a cash component in the amount of EUR 195 million ($230 million) to be paid within 12 months as well as approximately EUR 170 million ($200.5 million) in new shares (2.3 million shares) from a capital increase in kind effected through issuance of the company’s registered authorized capital exclusive of any shareholder subscription rights.

Taking into account this transaction, Block.one will hold an interest of approximately 18.2% in Northern Data, the company said in a statement to investors.

Aroosh Thillainathan, founder and CEO of Northern Data AG, said: “The acquisition of Block.one’s entire portfolio of GPU server systems represents a quantum leap in Northern Data’s corporate story. We thus now have at our disposal all critical components required to cover the enormous customer demand for data—processing capacity in the HPC area.

“I am particularly proud that the entire cluster is powered exclusively by green energy. We will shortly be taking further steps to complement our offering along the value-added chain in order to be able to meet the needs of tomorrow’s customers by providing everything from hardware to an HPC application platform.”

Northern Data will generate initial revenue and a corresponding contribution to EBITDA following completion of the transaction, which took place immediately after the execution of the agreement.

The anticipated impact at the level of the forecast for the 2021 financial year will be described in detail when the annual report for 2020 is published.

The company added that it intends to enter into negotiations with other companies on comparable transactions in order to internalize hardware capacities for mining.

Such acquisitions, which could also be concluded in the short term, would also be carried out using the existing Authorized Capital 2021 and would therefore not require any further resolution by the AGM.

Analogous to the Decentric transaction, such transactions could have a positive impact on the revenue and earnings situation of Northern Data if successful.

Northern Data plans to build one of the world’s largest GPU-based distributed computing clusters for HPC applications with locations in Norway, Sweden, the Netherlands and Germany.

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