Bitfarms to Acquire Stronghold Digital Mining in $125 Million Deal
Iris Coleman Aug 21, 2024 17:42
Bitfarms will acquire Stronghold Digital Mining in a stock-for-stock merger valued at $125 million, expanding its energy portfolio significantly.
Bitfarms Ltd. (Nasdaq/TSX: BITF), a global Bitcoin (BTC) data center company, has announced its acquisition of Stronghold Digital Mining, Inc. (Nasdaq: SDIG) in a stock-for-stock merger valued at approximately $125 million, according to globenewswire.com. The transaction also includes the assumption of $50 million in debt.
Strategic Expansion
The acquisition aligns with Bitfarms' strategic plan to expand and rebalance its energy portfolio, aiming to achieve approximately 50% of its energy capacity in the United States by the end of 2025. This move is expected to increase Bitfarms’ energy portfolio to over 950 megawatts (MW) by year-end 2025, with potential expansion capacity up to 1.6 gigawatts (GW) in subsequent years.
Stronghold’s Assets and Capabilities
Stronghold is a vertically integrated crypto asset mining company focused on Bitcoin mining and environmental remediation. As of June 30, 2024, the company has a hashrate of 4.0 exahashes per second (EH/s) and 165 MW of nameplate generated power capacity. Stronghold's assets include 142 MW of current Pennsylvania-New Jersey-Maryland Interconnection (PJM) import capacity, with the potential to bring its hashrate to approximately 10 EH/s in 2025 through fleet upgrades.
Stronghold owns over 750 acres of land and two merchant power plants, the Scrubgrass and Panther Creek Facilities in Pennsylvania. These plants are recognized as Tier 2 Alternative Energy Sources for their environmental benefits, including the reclamation of toxic waste and conversion into power.
Environmental and Financial Benefits
Bitfarms' acquisition of Stronghold is expected to extend its environmental leadership. Stronghold has reclaimed thousands of acres of toxic waste and has the potential to capture over 60,000 tons of carbon dioxide annually through its Carbon Capture Projects. Additionally, the transaction is anticipated to achieve $10 million in annual run-rate cost synergies.
Leadership Statements
Ben Gagnon, CEO of Bitfarms, commented, “This transformative acquisition is a decisive step in securing a strong future for Bitfarms. We expect to expand our energy portfolio to 950 MW with nearly 50% in the U.S. by the end of 2025.”
Gregory Beard, CEO and Chairman of Stronghold, added, “Bitfarms has the vision and financial fortitude to unlock the value of Stronghold’s assets. This combination is a unique opportunity to maximize value for the shareholders of both companies.”
Transaction Details
The Boards of Directors of both companies have unanimously approved the transaction, which is expected to close in the first quarter of 2025, subject to regulatory approvals and other customary closing conditions. Stronghold shareholders will receive 2.52 shares of Bitfarms for each share of Stronghold they own, representing a 71% premium to Stronghold’s 90-day volume-weighted average price on Nasdaq as of August 16, 2024.
Conference Call and Advisors
Bitfarms and Stronghold will conduct a conference call with investors to discuss the transaction on August 21, 2024, at 8:30 AM ET. Moelis & Company LLC is serving as a financial advisor to Bitfarms, while Houlihan Lokey Capital, Inc. is serving as a financial advisor to Stronghold.
For more information about the merger and to access the conference call, visit the original news source.
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