Bitfarms To Acquire Stronghold Digital Mining In $175M Merger

By: Isha Das

Bitcoin miner Bitfarms has announced a definitive merger agreement to acquire Stronghold Digital Mining. The transaction involves $125 million in equity value and the assumption of $50 million in debt, totaling $175 million.

In a joint statement on August 21, the Boards of Directors of both companies unanimously approved this deal. Subject to regulatory approvals and other standard conditions, the merger is anticipated to be completed by the first quarter of 2025.

As part of this acquisition, Stronghold shareholders will receive 2.52 shares of Bitfarms for each Stronghold share they possess. Post-merger, Stronghold shareholders are expected to own less than 10% equity of the combined company.

Expansion Potentials

The merger is set to significantly enhance Bitfarms' capacity to 307 MW, propelling it toward its goal of achieving 950 MW capacity by the end of 2025. This development aligns with Bitfarms' strategic initiatives to extend its expertise beyond Bitcoin mining, into high-performance computing (HPC) and artificial intelligence (AI).

Bitfarms CEO Ben Gagnon emphasized that the merger culminated after three years of meticulous negotiations. He noted, “With this transaction, we anticipate expanding and rebalancing our energy portfolio to 950 MW, with nearly 50% located in the U.S. by the end of 2025. We also see potential for multi-year expansion up to 1.6 GW, with approximately 66% in the U.S., up from about 6% today.”

Riot Platforms' Takeover Efforts

The merger coincides with Riot Platforms making a hostile takeover attempt on Bitfarms. Recently, Riot publicly revealed its augmented ownership stake in Bitfarms, now standing at 85.3 million shares, which constitutes about 18.9% of the company.

Riot's intensified efforts began after a failed $950 million takeover bid in April. The takeover attempt spurred significant changes within Bitfarms' boardroom, culminating in the departure of co-founder Nicolas Bonta and the subsequent appointment of Ben Gagnon as the new CEO.