Bitcoin mining company Bitfarms has acquired Stronghold Digital Mining for approximately $125 million, including $50 million in assumed debt. This acquisition is set to add up to 307 megawatts (MW) of power capacity and will help Bitfarms increase its energy portfolio to over 950 MW by the end of 2025.
Bitfarms, a leading Bitcoin mining firm, finalized the deal after three years of discussions with Stronghold. Bitfarms CEO Ben Gagnon described the acquisition as a “transformative” move that positions the company for future growth, especially as the Bitcoin mining industry faces pressures from reduced mining rewards and mounting debt.
The acquisition was announced after prolonged negotiations, with Bitfarms aiming to use this deal to expand its energy capacity and operations significantly over the coming years. By the end of 2025, Bitfarms expects to have 50% of its energy portfolio based in the U.S., a substantial increase from the current 6%.
Stronghold shareholders will receive 2.52 Bitfarms shares for each of their Stronghold shares, providing them with a 71% premium based on Stronghold’s 90-day average share price on Nasdaq as of August 16. Following the deal, Stronghold shareholders will hold just under 10% of the combined company. This acquisition is part of Bitfarms’ strategy to vertically integrate with power generation, expand energy trading capabilities, and diversify its operations into high-performance computing and artificial intelligence.
Bitcoin mining companies, like Bitfarms and Stronghold, have faced challenges from the recent Bitcoin halving, which reduced mining rewards. Stronghold had been exploring the possibility of selling itself for some time, having filed a registration statement in April to sell up to $250 million in securities to help alleviate its debt. In the first quarter of 2024, Stronghold reported $27.5 million in revenue, with the majority coming from its cryptocurrency operations.
The acquisition represents a key step in Bitfarms’ strategy to diversify beyond Bitcoin mining. By boosting its energy capacity and moving into other areas such as artificial intelligence and high-performance computing, Bitfarms is positioning itself to provide greater long-term value for shareholders and enhance its resilience in a volatile industry.
