FERC Approves MARA's Acquisition of Long Ridge Natural Gas Generation Assets

Odaily report: According to Matthew Sigel, Head of Digital Assets Research at VanEck, FERC has approved Bitcoin miner MARA Holdings' (MARA) acquisition of the Long Ridge natural gas generation assets, under docket number EC26-92. Sigel stated that objections raised by the Market Monitoring Unit (IMM) on grounds related to BlackRock and Vanguard were not upheld, and FERC also declined to make continued power supply from the plant to the PJM grid a condition of approval.According to Sigel's analysis, the transaction has an enterprise value of approximately $1.512 billion, corresponding to roughly 0.5 GW of natural gas generation capacity (485 MW approved output, 505 MW nameplate capacity) and approximately $144 million in annualized adjusted EBITDA, implying a valuation of about 10.5x. Recent PJM natural gas generation transactions have been valued at approximately 7x, which implies the plant itself is worth about $1 billion; the roughly $500 million premium corresponds to land, gas wells, rail access, and expansion options.MARA will assume approximately $900 million of Long Ridge debt and pay approximately $610 million in cash, which it plans to cover with the approximately $600 million Bitcoin-backed loan already drawn in August. The outside closing date for the transaction is November 30.Sigel noted that MARA has referenced approximately 600 MW of total AI load at the site, including approximately 200 MW of existing grid-connected load. Whether the expansion will proceed through a Starwood joint venture, and whether MARA can retain up to a 50% interest, remains unclear. Sigel believes the next catalyst could be the signing of a lease around the time of closing.