Key Points
- Bitfarms Ltd. is set to acquire Stronghold Digital Mining in a stock-for-stock merger valued at approximately $125 million in equity plus the assumption of $50 million in debt. This move significantly expands Bitfarms’ power capacity and U.S. presence in the Bitcoin mining sector.
- The acquisition includes two Pennsylvania-based power plants recognized for their environmental benefits, potentially adding up to 307 MW of power capacity and putting Bitfarms on track to increase its energy portfolio to over 950 MW by year-end 2025.
Merger Creates Powerhouse in Sustainable Bitcoin Mining
In a significant move that reshapes the landscape of Bitcoin mining, Bitfarms Ltd. (Nasdaq/TSX: BITF) has announced its plans to acquire Stronghold Digital Mining, Inc. (Nasdaq: SDIG) in a deal valued at approximately $175 million. The transaction, expected to close in the first quarter of 2025, will combine Bitfarms’ operational expertise with Stronghold’s strategic power assets and environmental remediation capabilities.
Ben Gagnon, CEO of Bitfarms, emphasized the transformative nature of the acquisition, stating, “This transaction is a decisive step in securing a strong future for Bitfarms.” The merger is set to dramatically increase Bitfarms’ energy portfolio and U.S. presence, with projections indicating nearly 50% of its power capacity will be in the United States by the end of 2025, up from approximately 6% today.
Environmental Leadership and Carbon Capture Potential
The acquisition aligns with Bitfarms’ commitment to sustainable mining practices. Stronghold’s facilities in Pennsylvania are recognized as Tier 2 Alternative Energy Sources, providing significant environmental benefits through the reclamation of mining waste and reduction of acid mine drainage.
Arnold Lee, Director of Sustainability at Bitfarms, highlighted the environmental aspects of the deal, noting, “Stronghold’s Carbon Capture Projects have the potential to capture over 60,000 tons of carbon dioxide annually, providing Bitfarms additional revenue and making it one of the largest potential carbon capture projects globally.”
Strategic Expansion and Synergies
The merger is expected to yield approximately $10 million in annual run-rate cost synergies. Moreover, it provides Bitfarms access to the strategically valuable PJM grid, the largest wholesale electricity market in the U.S., opening up opportunities for Bitcoin mining and energy trading.
Gregory Beard, CEO of Stronghold, expressed confidence in the partnership, stating, “We believe that we found the ideal partner. Bitfarms has the vision and financial fortitude to unlock the value of Stronghold’s assets.”
As the crypto mining industry continues to evolve, this merger positions Bitfarms as a leader in sustainable and efficient Bitcoin mining operations, with a significant footprint in North America and the potential for further expansion in high-performance computing and AI applications.
