Hut 8 Mining Corp (TSE: HUT), one of the largest innovation-driven digital asset extraction pioneers in North America, announced on Thursday that it has signed a deal to buy the cloud data center and colocation business from TeraGo Inc.
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Pivotal Moment in Hut 8’s Positioning
The acquisition consists of five data centers across Canada with a comprehensive information technology offering that includes a selection of scalable cloud services.
The consideration payable to TeraGo Inc. will consist of C$30 million, which will be funded from existing cash. Hut 8 will retain almost all current Data Center Business employees.
The transaction has been approved by the board of directors of Hut 8 and TeraGo. It is expected to close in the first quarter of 2022.
CEO Commentary
Hut 8 Mining CEO Jaime Leverton said, “As a team of Bitcoin and blockchain bulls, we are thrilled with the transformative growth opportunity this investment provides Hut 8. The acquisition of this complementary business diversifies Hut 8’s operations with a discrete, steady cash flow, that is uncorrelated to digital asset mining. This acquisition also puts us at the forefront of the accelerated digitization of industry, establishing us as the bridge between traditional and nascent iterations of high-performance computing. Our unconventional approach to revolutionizing conventional assets serves to drive Hut 8’s growth, innovation and market share in the high-performance computing, blockchain, and Web 3.0 industries.”
Wall Street’s Take
Two months ago, H.C. Wainwright analyst Kevin Dede kept a Buy rating on HUT with a C$24 price target. This implies 196.3% upside potential.
Overall, Hut 8 Mining stock scores a Moderate Buy consensus rating based on two Buys.
The average Hut 8 Mining price target of C$24.51 implies upside potential of about 202.6% to current levels.
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