Core Scientific, The Largest Blockchain Hosting Provider And Digital Asset Miner In North America, To List On NASDAQ Through Merger With Power & Digital Infrastructure Acquisition Corp.
AUSTIN, Texas and CHICAGO, July 21, 2021 /PRNewswire/ -- Core Scientific Holding Co. ("Core Scientific" or the "Company"), a leader in customizable infrastructure and software solutions to large scale customers for blockchain hosting and digital asset mining, and Power & Digital Infrastructure Acquisition Corp. (Nasdaq: XPDI), a publicly traded special purpose acquisition company, today announced they have entered into a definitive merger agreement pursuant to which XPDI will acquire the Company (the "Transaction"). As a result of the Transaction, which values the Company at a pro forma enterprise value of approximately $4.3 billion, the combined company is expected to operate as Core Scientific, Inc. and remain a publicly listed company on the NASDAQ stock market.
Core Scientific and XPDI Highlights
In addition to offering proprietary digital asset mining infrastructure and management software to large-scale partners around the world, Core Scientific's pending acquisition of Blockcap, Inc. ("Blockcap"), a leader in digital asset mining, positions the Company as North America's largest vertically integrated self-mining business. Blockcap's recent acquisition of RADAR, a pioneer in the blockchain technology space, further strengthens Core Scientific's leadership position and value creation potential through the development of decentralized finance ("DeFi") products and services. Core Scientific intends to grow its business while maintaining 100% net carbon neutral operations through a combination of clean energy inputs and the purchase of renewable energy credits.
XPDI believes that Core Scientific presents an opportunity to invest in a leader in multiple XPDI target industry sectors of blockchain and frontier technology infrastructure. XPDI's management team and independent directors comprise experienced investors, advisors, developers, and operators in energy and ESG. XPDI is a special purpose acquisition company with a blockchain infrastructure focus supported by BlackRock, the world's largest asset manager and the anchor investor in XPDI. XPDI closed its upsized, oversubscribed initial public offering in February 2021 and has approximately $345 million cash in trust.
Management and Governance
"We are excited to enter into the Transaction at a significant inflection point in Core Scientific's growth trajectory and in the advancement of blockchain technology," said Mr. Levitt. "We have built the largest blockchain hosting provider and digital asset miner in North America. Our diversified business is positioned to continue supporting the growth and adoption of digital assets globally. We are successfully leveraging our first mover advantage, scale, proprietary designs and software, network of strategic relationships, and culture of innovation to create value for our customers and stakeholders. With our pending acquisition of Blockcap, we look forward to growing our self-mining digital asset business while continuing to deliver best-in-class reliability and performance to leading blockchain innovators."
Said Darin Feinstein, "Core Scientific's blockchain infrastructure business is unparalleled, backed by more than 70 blockchain and infrastructure-related patents and applications, and led by an amazing team, which now will be creating value for our collective stakeholders. We are proud to unite our companies and move forward into the capital markets."
Patrick Eilers, Chief Executive Officer of XPDI, said, "Core Scientific is at the epicenter of disruptive technologies, which collectively comprise a large and growing market opportunity for Bitcoin and other digital assets. XPDI views the Company as solving a pressing need for a credible, reliable and focused enterprise solutions provider capable of powering these new, long-term growth markets and adjacencies presented by broader blockchain applications and technologies. Moreover, the Company's commitment to ESG as a 100% net carbon-neutral business aligns with XPDI's aim to take today's high growth sectors and power them with more sustainable sources of energy."
Ted Brombach, Chairman of XPDI, further stated "We are very pleased to support Core Scientific's transition to the public markets and believe that the Company's vertical integration will provide a competitive advantage in the industry."
The Transaction is expected to provide in excess of $300 million in net cash proceeds to Core Scientific at closing, after transaction expenses and assuming no redemptions of shares by XPDI's existing public stockholders. Existing Core Scientific stockholders are retaining 100% of their equity in the combined company. Core Scientific stockholders (including former stockholders of Blockcap) will own approximately 89%, XPDI public stockholders will own approximately 8% and XPDI's sponsor will own approximately 2% of the issued and outstanding shares of common stock, respectively, of the combined company at closing. The proceeds from the Transaction are expected to fund mining equipment purchases and infrastructure build out as the Company expands its leadership position.
The Core Scientific and XPDI Boards of Directors have unanimously approved the proposed merger, which is expected to be completed in the fourth quarter of 2021, subject to, among other things, regulatory approval, the approval by Core Scientific's and XPDI's stockholders of the proposed merger and satisfaction or waiver of other customary closing conditions.
Additional information about the proposed merger, including a copy of the merger agreement and investor presenttion, will be provided in a Current Report on Form 8-K to be filed by XPDI today with the Securities and Exchange Commission (the "SEC") and available at www.sec.gov. The investor presentation can also be found on the Investors section of Core Scientific's website at www.corescientific.com. XPDI intends to file a registration statement, which will contain a proxy statement/prospectus, with the SEC in connection with the Transaction.
Evercore is serving as financial advisor to Core Scientific in connection with the Transaction. Cooley LLP is serving as legal advisors to Core Scientific.
About Core Scientific
About Power & Digital Infrastructure Acquisition Corp.
Forward Looking Statements
These forward-looking statements are provided for illustrative purposes only and are not intended to serve, and must not be relied on by any investor, as a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of XPDI and Core Scientific. These forward-looking statements are subject to a number of risks and uncertainties, including the ability of XPDI and Core Scientific to successfully or timely consummate the proposed Transaction, including the risk that any regulatory approvals are not obtained, are delayed or are subject to unanticipated conditions that could adversely affect the combined company or the expected benefits of the proposed Transaction or approval of the shareholders of XPDI or Core Scientific; failure to realize the anticipated benefits of the proposed Transaction; the combined company's ability to execute on its business model, potential business expansion opportunities and growth strategies, retain and expand customers' use of its services and attract new customers, and source and maintain talent; risks relating to the combined company's sources of cash and cash resources; risks relating to the blockchain and frontier technology infrastructure sectors, including the unregulated nature of the cryptocurrency space and potential future regulations, volatility of the price of digital assets, changes in the award structure for solving digital assets and limited availability of electric power resources; risks relating to Core Scientific's and the combined company's vulnerability to security breaches; risks relating to the uncertainty of the projected financial information with respect to the combined company; the combined company's ability to manage future growth; the effects of competition on the combined company's future business; the amount of redemption requests made by XPDI's public stockholders; the ability of XPDI or the combined company to issue equity or equity-linked securities in connection with the proposed Transaction or in the future; the outcome of any potential litigation, government and regulatory proceedings, investigations and inquiries; the impact of the COVID-19 pandemic on Core Scientific's or the combined company's business and the global economy; and those factors discussed in XPDI's final prospectus related to its initial public offering dated February 9, 2021 under the heading "Risk Factors," in XPDI's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 under the heading "Risk Factors" filed with the SEC on May 25, 2021 and other documents of XPDI filed, or to be filed, with the SEC. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that neither XPDI nor Core Scientific presently know or that XPDI and Core Scientific currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect XPDI's and Core Scientific's expectations, plans or forecasts of future events and views as of the date of this press release. XPDI and Core Scientific anticipate that subsequent events and developments will cause XPDI's and Core Scientific's assessments to change. However, while XPDI and Core Scientific may elect to update these forward-looking statements at some point in the future, XPDI and Core Scientific specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing XPDI's and Core Scientific's assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.
Use of Projections
Additional Information and Where to Find It
INVESTMENT IN ANY SECURITIES DESCRIBED HEREIN HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY OTHER REGULATORY AUTHORITY NOR HAS ANY AUTHORITY PASSED UPON OR ENDORSED THE MERITS OF THE OFFERING OR THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED HEREIN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Participants in the Solicitation
No Offer or Solicitation
Footnote for 2021 & 2022:
Source: Core Scientific
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