Bitfarms Expands U.S. Footprint with $175 Million Stronghold Digital Mining Acquisition
In a strategic move to bolster its presence in the United States and diversify beyond Bitcoin mining, Bitfarms, a global Bitcoin mining company, has announced a definitive agreement to acquire Stronghold Digital Mining in a $175 million stock and debt-financed deal.
The acquisition, which has been unanimously approved by the boards of directors of both companies, is expected to close in the first quarter of 2025, subject to Stronghold shareholder approval and regulatory clearances.
Under the terms of the agreement, Stronghold shareholders will receive 2.52 shares of Bitfarms for each share they own, representing a 71% premium to Stronghold’s 90-day volume-weighted average price on Nasdaq as of August 16. Upon closing, Stronghold shareholders are expected to own just under 10% of the combined company.
Bitfarms CEO Ben Gagnon hailed the transaction as a “transformative acquisition” that is a “decisive step in securing a strong future” for the company. The deal is expected to add up to 307 megawatts (MW) of power capacity to Bitfarms’ energy portfolio, putting the company on track to increase its total energy capacity to over 950 MW by the end of 2025, with nearly 50% of that coming from the U.S.
Stronghold, a vertically integrated Bitcoin mining company, owns two merchant power plants in Pennsylvania that are recognized as Tier 2 Alternative Energy Sources. These facilities convert mining waste into power through a specialized process, providing significant environmental benefits. The acquisition will also add 4 exahashes per second (EH/s) to Bitfarms’ existing hashrate, with the potential to exceed 10 EH/s by 2025 through fleet upgrades.
“By vertically integrating with power generation, expanding our energy trading capabilities and securing two high potential sites for HPC/AI with significant multi-year expansion potential, we are executing our strategy to diversify beyond Bitcoin mining to create greater long-term shareholder value,” Gagnon said.
The strategic rationale behind the deal is clear – Bitfarms is looking to reduce its reliance on Bitcoin mining and explore new revenue streams in areas such as high-performance computing (HPC) and artificial intelligence (AI) processing. The acquisition of Stronghold’s assets, including its power generation facilities, will help Bitfarms achieve its goal of balancing its energy portfolio and increasing its presence in the U.S.
The transaction is expected to generate $10 million in annual cost synergies for the combined company, further enhancing the strategic and financial benefits of the deal.
The announcement comes amid a period of uncertainty for the Bitcoin mining industry, with the recent Bitcoin halving event putting pressure on miners’ revenues. By diversifying its business and expanding its footprint, Bitfarms aims to position itself for long-term success in the rapidly evolving digital assets landscape.
