FERC Approves MARA's Acquisition of Long Ridge Natural Gas Power Plant

The Federal Energy Regulatory Commission (FERC) has approved the acquisition of Long Ridge natural gas power assets by Bitcoin mining company MARA Holdings (MARA), with an enterprise value of approximately $1.512 billion. This corresponds to about 0.5 GW of natural gas generation capacity (approved output of 485 MW and nameplate capacity of 505 MW) and an annualized adjusted EBITDA of approximately $144 million, valuing the deal at about 10.5 times EBITDA. The objections raised by market monitoring agency IMM, based on reasons related to BlackRock and Vanguard, were not supported, and FERC rejected the condition to keep the plant's output within the PJM grid as a condition for approval. Recently, the valuation of PJM gas power transactions has been around 7 times EBITDA, which estimates the plant's intrinsic value at about $1 billion, indicating that MARA is paying about $500 million for land, gas wells, railroads, and expansion options. MARA will retain approximately $900 million in debt from Long Ridge and will need about $610 million in cash, which is planned to be covered by a collateral loan of approximately $600 million in Bitcoin that was withdrawn in August. The external deadline for the transaction is November 30. MARA mentioned that the site has a total AI load of about 600 MW, including an existing grid load of about 200 MW; it remains unclear whether the expansion will be co-invested with Starwood and whether MARA can retain up to 50% equity.

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