CleanSpark to Acquire Rival GRIID in $155 Million Deal
By: Isha Das
CleanSpark, a prominent Bitcoin mining firm, has agreed to acquire its competitor GRIID Infrastructure for a substantial $155 million. This strategic acquisition aims to bolster CleanSpark's capacity and extend its reach in the bitcoin mining industry. According to a statement released on June 27, the deal will provide CleanSpark with a clear pathway toward achieving 400 megawatts of power capacity in Tennessee over the next few years.
The acquisition will enable CleanSpark to take on all of GRIID’s existing debt and obligations. Additionally, CleanSpark has extended a $5 million working capital loan and a $50.9 million bridge loan to GRIID to fulfill certain obligations at the time of signing the agreement. CleanSpark CEO Zach Bradford expressed optimism about the acquisition, stating that it would help the company replicate its success in Georgia and ultimately exceed 400 megawatts in Tennessee by 2026.
As part of the acquisition terms, GRIID shareholders will receive CleanSpark common stock based on an exchange ratio determined at the merger's closing. The transaction has received unanimous approval from the Boards of Directors of both companies and is anticipated to close in the third quarter of 2024. However, the deal still requires approval from GRIID shareholders and must meet other customary closing conditions.
This acquisition comes at a critical time for Bitcoin miners, who are grappling with significant challenges following recent halving events that have impacted their earnings. Many miners are diversifying their revenue streams by mining alternative cryptocurrencies and exploring opportunities in artificial intelligence and other sectors. This strategic move by CleanSpark to acquire GRIID highlights its commitment to expanding its capabilities and addressing the ongoing challenges in the Bitcoin mining industry.
Established in 2018, GRIID began its mining operations in 2019 and currently runs four facilities in Watertown, New York, and Limestone, Maynardville, and Lenoir City, Tennessee. Additionally, GRIID has a Research and Development Center in Austin, Texas, and a Development, Deployment, and Equipment Repair Center in Rutledge, Tennessee. Following the news of the acquisition, GRIID shares plummeted by approximately 50%, while CleanSpark's stock saw a modest increase of nearly 4%.
