Bitfarms Merges with Stronghold to Boost Energy and Capacity
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Bitfarms to Acquire Stronghold Digital Mining
Bitfarms Ltd. (Nasdaq/TSX: BITF), a global vertically integrated Bitcoin data center company, has entered into a definitive merger agreement to acquire Stronghold Digital Mining, Inc. (Nasdaq: SDIG) in a stock-for-stock transaction. This agreement is valued at approximately US$125 million in equity plus US$50 million in assumed debt.
Strategic Benefits of the Acquisition
With the acquisition, Bitfarms plans to expand and rebalance its energy portfolio to approximately 50% in the U.S. by 2025, in line with its strategic plan. Stronghold, which is focused on environmentally beneficial operations, has a current hashrate of 4.0 EH/s that could potentially reach 10 EH/s following fleet upgrades.
Power Generation and Import Capacity
Stronghold operates two merchant power plants and has significant land holdings that include over 750 acres, which offers potential for further expansion. This merger supports the addition of 142 MW of current Pennsylvania-New Jersey-Maryland Interconnection (PJM) import capacity with the prospect of additional capacity beyond 2025, creating opportunities for competitive energy procurement critical for mining operations.
Environmental Leadership and Carbon Capture Initiatives
Bitfarms has demonstrated its commitment to environmental leadership and sustainability. The acquisition of Stronghold's reclamation facilities furthers this commitment, as Stronghold has successfully reclaimed thousands of acres of land affected by mining activities. This endeavor reduces environmental harm while contributes toward significant carbon capture initiatives that aim to lessen their overall carbon footprint.
Operational Synergies and Future Expansion
The merger is expected to deliver approximately $10 million in annual run-rate cost synergies. Additionally, the combined organization envisions an energy portfolio exceeding 950 MW by the end of 2025. Studies are already in progress to explore further import capacity expansion beyond 2025.
Leadership Insight and Future Outlook
Ben Gagnon, CEO of Bitfarms, expressed optimism about the future direction of the firm post-merger, mentioning that the move to vertically integrate power generation is a decisive step to broaden their operations beyond Bitcoin mining. Meanwhile, Gregory Beard, CEO of Stronghold, highlighted the strategic fit of the partnership, expecting that it would unlock greater value for shareholders.
Frequently Asked Questions
What is the significance of Bitfarms acquiring Stronghold?
The acquisition aims to expand Bitfarms' energy capacity and operational footprint in the U.S. while enhancing its environmental sustainability initiatives.
How will this merger impact Bitfarms’ power capacity?
Through this merger, Bitfarms plans to increase its energy portfolio to over 950 MW by the end of 2025, with potential for significant future expansions.
What environmental benefits does this acquisition provide?
The merger allows Bitfarms to enhance its environmental focus by acquiring Stronghold's capabilities in land reclamation and carbon capture initiatives.
What are the expected cost synergies from the merger?
Bitfarms anticipates around $10 million in annual run-rate cost synergies from the merger.
When is the transaction expected to close?
The merger is subject to approvals and is expected to close in the first quarter of 2025.
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