Cathedra to Merge With Sphere 3D in US-Listed Bitcoin Mining Deal
Sphere 3D (Nasdaq: ANY) has agreed to a business combination with Cathedra Bitcoin in an all-stock transaction as companies in the digital asset mining sector seek scale and broader access to capital.
The deal, announced Thursday, will result in Cathedra becoming a wholly owned subsidiary of Sphere 3D. Cathedra shareholders will receive Sphere shares and securities convertible into Sphere stock representing about 49% of the combined company on a partially diluted basis, according to a statement from the companies. Sphere 3D’s share price jumped 14% during pre-market trading hours on Friday.
The merged entity will retain Sphere’s Nasdaq listing under the ticker ANY and be led by Cathedra Chief Executive Officer Joel Block, who is expected to take the helm of the combined company. Sphere CEO Kurt Kalbfleisch will step down from that role but remain chief financial officer and join the board.
“By combining our existing data center portfolio and development capabilities with Sphere’s public market access and asset base, we believe we are creating a vertically integrated platform positioned to scale,” Block said in the statement.
The combined company is expected to initially operate about 53 megawatts of power capacity across five data centers in Iowa, Kentucky and Tennessee, supporting roughly 1.2 EH/s of proprietary bitcoin mining capacity.
The firms also said they plan to evaluate expansion into high-performance computing and artificial-intelligence workloads, reflecting a broader trend across the bitcoin mining sector as operators look to diversify beyond volatile mining revenues.
Sphere 3D, which has operated bitcoin mining fleets across several hosting facilities in North America, has spent the past several years stabilizing its balance sheet after earlier industry downturns.
The proposed merger comes two years after Cathedra’s reverse takeover merger with U.S-based Kungsleden, a mining colocation provider that was already hosting a portion of Cathedra’s proprietary hashrate in Tennessee.
Following that restructuring, Cathedra said it was pursuing a U.S. stock-market listing by the end of 2024 to broaden its access to capital. That effort did not materialize on the original timeline.
The Sphere transaction is expected to close following shareholder, regulatory and court approvals. If completed, the combined company said it plans to pursue more than 100 megawatts of additional development opportunities tied to energy-focused data-center projects across North America.
