Bitfarms to Acquire Stronghold Digital for $125 Million

Canadian mining company Bitfarms has entered into a definitive agreement to acquire its American competitor, Stronghold Digital Mining, in a deal valued at approximately $125 million.

We are pleased to announce that #Bitfarms has entered into a definitive agreement to acquire @Stronghold_DM.

Stronghold brings to Bitfarms vertically integrated crypto asset mining operations and access to the strategically desirable PJM grid, the largest wholesale electricity… pic.twitter.com/HemcStdETS

— Bitfarms (@Bitfarms_io) August 21, 2024

The agreement also involves Bitfarms assuming approximately $50 million in debt.

Stronghold boasts a hash rate of 4 EH/s, with plans to increase to 10 EH/s by 2025, contingent upon fleet upgrades. The firm owns two commercial power plants, Scrubgrass and Panther Creek, in Pennsylvania. Both facilities are alternative energy sources, processing coal industry waste.

The acquisition could add approximately 307 MW of available capacity to Bitfarms, potentially expanding its portfolio to 950 MW by the end of 2025. 

The company is currently evaluating the potential to apply its energy efficiency methods and increase operational hash rate at Stronghold’s facilities, as well as integrating AI computing with bitcoin mining operations.

“We have been in discussions with Bitfarms for a long time. After receiving and reviewing numerous proposals in our search for strategic alternatives, we believe we have found the ideal partner with the vision and financial stability to unlock the value of Stronghold’s assets,” stated Gregory Beard, CEO of the American firm.

The boards of directors of both companies have approved the deal, which is expected to close in the first quarter of 2025. 

Under the terms, Stronghold shareholders will receive Bitfarms shares for their stake in the firm, with a 71% premium to the volume-weighted average price on Nasdaq over 90 days as of August 16. They will own just under 10% of the combined company.

Earlier in August, Riot Platforms increased its stake in Bitfarms to 18.9% as part of a hostile takeover strategy. 

In July, the Canadian firm adopted a new “poison pill” defense plan, which limits the accumulation of shares to 20%.