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Mining company Bitfarms (ticker: BITF) has agreed to acquire rival Stronghold Digital (ticker: SDIG) in a $175 million equity and debt financing deal. The boards of directors of both companies have “unanimously approved” the acquisition, Due date In the first quarter of 2025.
The two companies are merging in a $125 million stock-for-stock deal, with Bitfarms assuming $50 million of Stronghold’s debt. Bitfarms is paying a 71% premium to the 90-day volume-weighted average price of Stronghold stock as of August 16. Stronghold shareholders will receive 2.52 shares of Bitfarms’ BITF for each share they own.
SDIG is up more than 70% in Wednesday’s trading session, while BITF is down 5% at the time of writing.
The deal comes at a time of uncertainty for many Bitcoin miners around the world, who are seeing revenues decline due to the fourth Bitcoin halving. Several companies are looking to better compete by expanding their operations, mining fleets, and geographic footprints, in addition to expanding into adjacent industries such as high-performance computing.
For example, Riot, one of the largest Bitcoin miners in the United States, is pursuing an acquisition of Bitfarms. The latter reported a net loss of $27 million last quarter. Riot has acquired about 20% of Bitfarms’ stock, making it the largest shareholder, and has appointed three independent directors to the board to replace Bitfarms’ co-founders.
“With this transaction, we expect to expand and rebalance our energy portfolio to 950 MW by the end of 2025, approximately 50% of which will be in the United States,” Bitfarms CEO Ben Gagnon said in a statement. “By vertically integrating with generation, expanding our energy trading capabilities, and acquiring two high-potential HPC/AI sites with significant potential for expansion over the next several years, we are executing on our strategy to diversify beyond Bitcoin mining.”
Bitfarms, which was founded in 2017 and currently operates 12 Bitcoin mining facilities in four countries – Canada, the United States, Paraguay and Argentina – will acquire two “Tier 2” commercial power plants from Stronghold in Pennsylvania.
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