Bitcoin mining companies Bitfarms (BITF) and Stronghold Digital (SDIG) have announced a merger in a deal valued at $175 million. The transaction, which is expected to close in the first quarter of 2025, involves a combination of stock and debt financing.
Under the terms of the agreement, Stronghold shareholders will receive 2.52 shares of Bitfarms for each share they own. Bitfarms is offering a 71% premium on Stronghold’s 90-day volume-weighted average price as of August 16.
The merger comes amid a challenging period for the bitcoin mining industry, which has been impacted by the recent halving of block rewards. Many companies are seeking to expand their operations and diversify their revenue streams to better compete in the competitive landscape.
Bitfarms believes that the acquisition of Stronghold will strengthen its position in the industry. By combining their resources and expertise, the companies aim to expand their energy portfolio, increase their mining capacity, and explore new opportunities in adjacent markets.
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“With this transaction, we expect to expand and rebalance our energy portfolio to 950 MW with nearly 50% in the U.S. by the end of 2025,” said Bitfarms CEO Ben Gagnon in a statement. “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.”
The merger is expected to create a larger, more diversified bitcoin mining company with a stronger financial position. However, it remains to be seen whether the deal will be successful in helping Bitfarms and Stronghold navigate the challenges of the industry.
