Cipher Mining Technologies, a U.S.-based Bitcoin mining firm, will become a publicly-traded company via a special acquisition company (SPAC). Good Works (Nasdaq:GWAC) has agreed to a merger and following the combination the new entity will be called Cipher Mining trading under the symbol CIFR. Cipher Mining is a newly formed subsidiary of Bitfury Top HoldCo B.V.
Good Works currently holds a market valuation of around $242 million. Shares have traded higher today as the market inched higher to close the week.
According to a release, the transaction values the combined company at an enterprise value of $2.0 billion. The combined company is expected to receive approximately $595 million in gross cash proceeds from a combination of cash from a US $425 million fully committed stock PIPE [Private Investment in Public Equity], including a $50 million investment in-kind from Bitfury, and approximately US $170 million in cash held in Good Works’ trust account from its IPO in October 2020.
The PIPE is said to be anchored by institutional investors including funds and accounts managed by Fidelity Management & Research Company and Counterpoint Global (Morgan Stanley).
Current Cipher Mining shareholders will become the majority owners of the combined company at closing with approximately 70% ownership in the pro forma company and all existing shareholders and investors will continue to hold their equity ownership subject to a two-year lock-up period.
The PIPE investors, including Bitfury, will own approximately 15%, Good Works, inclusive of its founder shares will own approximately 7.5%, and Cipher employees will own approximately 7% of the pro forma company at closing.
The Bitfury Group is a provider of Bitcoin mining hardware and other blockchain software and services. Since its inception in 2011, Bitfury Group has deployed more than 500+ MW of computing power and mined more than 600 thousand Bitcoin.
Good Works’ Co-Chairman, Doug Wurth, said his team has a long history in the alternative asset markets.
“We were attracted to Cipher Mining as we believe the Bitcoin mining space represents a compelling way to gain risk-adjusted exposure to the growing crypto ecosystem. We brought to the table experience in power hosting arrangements, which gave us a clear-eyed view of the advantages of Cipher Mining’s power contracts, and the extraordinary value of its partnership with Bitfury Group. Cipher Mining’s management team and the size of its operations will enable it to execute well across many price environments, and we are excited to help them become the leading Bitcoin mining company in the United States.”
Tyler Page, Cipher Mining’s CEO the transaction means they will be able to combine the skill sets and technologies developed by Bitfury Group and become a true leader in the Bitcoin mining industry.
“We believe that our U.S. domicile provides us additional advantages of low-cost, reliable power and a transparent, stable and secure regulatory and corporate environment. This combination of factors positions us to become the leading Bitcoin miner and also enables future vertical integration opportunities across the Bitcoin ecosystem.”