New York, August 21, 2024 - PRISM MarketView - Stronghold Digital (SDIG) shares rose today ~70% on the announcement of its acquisition by Bitfarms (BITF). The transaction is valued at $125M equity value plus the assumption of ~$50M in debt. Stronghold is a vertically integrated crypto asset mining company focused on mining Bitcoin and environmental remediation and reclamation services.
Stronghold owns over 750 acres of land with options on over 1,100 additional acres along with two merchant power plants: the Scrubgrass and Panther Creek Facilities in Pennsylvania. These two power plants are recognized by Pennsylvania as a Tier 2 Alternative Energy Source (the same category as large-scale hydro) for their proven and significant environmental benefits.
The Transaction could add up to 307 MW of power capacity and is expected to put Bitfarms on track to increase its energy portfolio to over 950 MW by year-end 2025. Under the terms of the agreement, Stronghold shareholders will receive 2.52 shares of Bitfarms for each share of Stronghold they own, representing consideration per share of $6.02, a 71% premium to the Stronghold average 90-day volume-weighted average price on Nasdaq as of August 16, 2024. At close, Stronghold shareholders are expected to own just under 10% of the combined company, based on the current issued and outstanding shares of each company.
The Transaction delivers compelling transaction economics while achieving an estimated $10M in annual run-rate cost synergies.
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