Bitfarms to buy Stronghold Digital Mining for ~$165M

Canadian cryptocurrency mining company Bitfarms (NASDAQ:BITF) to acquire Stronghold Digital Mining (NASDAQ:SDIG) for ~$165M, fending off Riot Platforms (RIOT).

The transaction includes $125M equity value plus ~$50M worth debt. It is expected to achieve an estimated $10M in annual run-rate cost synergies.

Bitfarms (BITF) reported Q2 revenue of $41.5M, and the merger would boost its mining capacity by providing more access to power.

Stronghold (SDIG) has power generation sites in Pennsylvania and went public in October 2021, raising $127M in its initial public offering. As of June 30, 2024, Stronghold (SDIG) has a hashrate of 4.0 EH/s and 165 MW power capacity, with the potential to bring its hashrate to ~10 EH/s in 2025.

The transaction is expected to close in Q1 2025.

Stronghold (SDIG) shareholders will receive 2.52 shares of Bitfarms (BITF) for each share they own, representing consideration per share of $6.02 and a 71% premium to 90-day volume-weighted average price on Nasdaq as of August 16, 2024.

Shares of Bitfarms (BITF) dropped 6.36%, while Stronghold Digital Mining (SDIG) stock jumped ~50% to $4.40 on Wednesday during pre-market trade.