Bitfarms is set to significantly expand its U.S. operations with the acquisition of Stronghold Digital Mining, aiming for 950 MW power capacity by late 2025.
Bitfarms Ltd., a major player in the global Bitcoin mining industry, announced its plans to acquire Stronghold Digital Mining, Inc., a vertically integrated Bitcoin mining company with an emphasis on environmentally beneficial operations, in a stock-for-stock transaction valued at approximately $125 million. The deal, which also involves the assumption of $50 million in debt, marks a strategic move to boost Bitfarms’ energy portfolio and mining capacity, particularly in the United States.
The acquisition is part of Bitfarms’ broader strategy to increase its energy capacity to 950 megawatts (MW) by the end of 2025, with around half of that power being sourced from U.S. operations. This move is expected to enhance Bitfarms’ ability to mine Bitcoin more efficiently and sustainably, while also allowing the company to diversify its activities into high-performance computing (HPC) and artificial intelligence (AI) projects.
Stronghold brings to the table a current hashrate of 4.0 exahashes per second (EH/s), with the potential to expand to over 10 EH/s following upgrades to its mining fleet. The company also contributes 165 MW of power from its Scrubgrass and Panther Creek facilities in Pennsylvania, which are recognized for their environmental benefits and classified as Tier 2 Alternative Energy Sources in the state.
These facilities, situated within the Pennsylvania-New Jersey-Maryland (PJM) Interconnection, allow Bitfarms to tap into one of the largest electricity markets in the U.S. and import up to 790 MW of power. This strategic positioning is expected to support Bitfarms’ long-term goals of enhancing its energy efficiency and integrating its Bitcoin mining operations with other computational demands like HPC and AI.
Bitfarms’ CEO, Ben Gagnon, emphasized that this acquisition is a pivotal step for the company, helping to secure its future by expanding its energy capacity and diversifying its operations. He highlighted that by the end of 2025, nearly 50% of Bitfarms’ energy portfolio will be based in the U.S., up from the current 6%. Gagnon also noted the environmental benefits of the deal, with Stronghold’s facilities playing a key role in reducing toxic waste and carbon emissions, aligning with Bitfarms’ commitment to sustainability.
Stronghold’s CEO, Gregory Beard, expressed confidence in Bitfarms’ ability to unlock the full potential of Stronghold’s assets, stating that the merger offers a unique opportunity for both companies’ shareholders to benefit from the combined growth and synergies.
The transaction, which has been unanimously approved by the boards of both companies, is expected to close in the first quarter of 2025. Upon completion, Stronghold shareholders will receive 2.52 shares of Bitfarms for each share they own, representing a 71% premium to Stronghold’s 90-day average share price on Nasdaq as of 16 August 2024. Stronghold shareholders are expected to own just under 10% of the combined company.
In addition to the significant expansion of power capacity and mining capabilities, the merger is anticipated to deliver approximately $10 million in annual cost synergies, further enhancing the combined company’s operational efficiency.
Featured Image via Pixabay
