Bitfarms has revealed a strategic acquisition of its own after fending off Riot Platforms’ attempts to buy the company.
The Toronto-based bitcoin miner is set to acquire segment peer Stronghold Digital Mining in a stock-for-stock transaction worth about $125 million, the company said Wednesday. It will also assume roughly $50 million in debt, valuing the acquisition at roughly $175 million.
The “transformative” deal comes after three years of ongoing discussions with the New York-headquartered company, Bitfarms CEO noted in a statement. With Stronghold, the firm could add up to 307 megawatts of power capacity, helping it reach 950 MW by the end of 2025 — roughly half of that being in the US.
“By vertically integrating with power generation, expanding our energy trading capabilities and securing two high potential sites for [high-performance computing]/AI with significant multi-year expansion potential, we are executing our strategy to diversify beyond bitcoin mining to create greater long-term shareholder value,” stated Bitfarms CEO Ben Gagnon.
Read more: Where bitcoin miners stand after Q2 disclosures
Stronghold executives had noted the possibility of selling the company in May — about two weeks after the Bitcoin halving, when per-block mining rewards dipped from 6.25 BTC to 3.125 BTC.
Leaders at the firm argued at the time that the company’s stock price was trading at a massive discount. They touted its 130 MW of energized data center capacity with an installed hash rate of 4.1 exahash per second (EH/s), as well as its 750 acres of owned land.
Stronghold CEO Gregory Beard said in a Wednesday statement he believes his company has found an “ideal partner” among the numerous bids it received amid its strategic alternatives review process.
“We look forward to leveraging Bitfarms’ operational expertise and proprietary data analytics system to further optimize our sites and return once-blighted land to local communities,” he added. “I am confident that this combination is a unique opportunity to maximize value for the shareholders of both companies.”
Stronghold’s stock price surged roughly 69% in morning trading. Bitfarms shares, meanwhile, were lower in early trading.
The acquisition follows Riot Platforms’ attempted hostile takeover of Bitfarms earlier this year. Riot’s stake in the company rose to nearly 19% last week, at which time it did not rule out “submitting a revised proposal to acquire” Bitfarms. Riot seeks a vote on two possible new board directors at a Bitfarms shareholder meeting in October.
Read more: Bitfarms founder steps down from board after Riot takeover attempt
A Riot spokesperson did not immediately return a request for comment about Bitfarms’ acquisition.
Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.
Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.
The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.
Source: https://blockworks.co/news/bitfarms-stronghold-digital-mining-acquisition