China-based bitcoin mining firm Canaan Creative announced yesterday it had agreed to sell its operations to a publicly listed electronics firm in a deal that would mark the biggest exit for a bitcoin company to date should it be approved by local regulators.
The reported cash and stock stock deal, which has yet to be confirmed by the purchasing party Shandong Luyitong, values Canaan (known commonly by the name of its bitcoin mining chip brand, Avalon) at approximately ¥3.06bn (roughly $466m), according to its representatives. The company further said that Luyitong paid roughly ¥1bn (approximately $152m) in cash, and issued 81 million shares at an average price per share of ¥24.57 ($3.74), representing an additional ¥1.99bn (roughly $303m).
Canaan said that its strong sales projections fueled the valuation, and that it anticipates a net profit of $27m for 2016, with expectations of $39m and $53m in 2017 and 2018, respectively.
Big numbers aside, the deal isn’t yet complete.
Though both sides have signed an acquisition agreement according to Canaan, the Chinese government still has to greenlight the purchase as it involves a domestic firm with a publicly listed stock. Canaan said that while it expects the deal to go through, regulators