Bitfarms, a big name in Bitcoin mining, paid about $125 million to buy Stronghold Digital Mining. As part of this deal, Bitfarm is taking on $50 million in debt. This is a big step toward its goal of growing, especially in the US.
For every Stronghold share a person owns, they will get 2.52 Bitfarms shares as part of the deal. Stronghold’s 90-day volume-weighted average stock price on Nasdaq as of August 16 is about 71% less than the price of this market. We think that people who own Stronghold will own around 10% of the new business after it merges.
After the buy, Bitfarm will have a lot more power. It might reach 307 megawatts (MW) by the end of 2025. Bitfarms will be able to improve its energy mix now that it has more money. It used to get almost half of its power from U.S. companies, but now only 6% of it does. Bitfarms will be able to boost its power to 1.6 gigawatts (GW) in the future. Thanks to the merger, about 66% of that power will be based in the US.
Our CEO, Ben Gagnon, talked about how important this deal is for the whole business. He made it clear that adding Stronghold’s assets will help Bitfarms grow its business beyond Bitcoin mining to include projects in artificial intelligence (AI) and high-performance computing (HPC). Gagnon also said that Stronghold’s operations are good for the earth because they burn waste coal to make energy. This agrees with Bitfarms’ goal to be green.
Stronghold Digital Mining has been thinking about its future, like whether it could be sold, because it needs money. The company made $27.5 million in the first quarter of 2024, which is 27% more than the next quarter, but it also lost $21.3 million. Even with these issues, Stronghold’s actions are good for the earth, which is why Bitfarms chose to buy it.
Both companies’ boards of directors agreed to the merger without any disagreement. As long as officials and owners agree, the deal should go through in the first quarter of 2025. Bitfarms’ position in the Bitcoin mining industry is strengthened by this buy. The company also has better long-term growth prospects as it gains access to more energy resources and expands its operations.
