Bitfarms Acquires Competitor Stronghold Digital in a $125 Million Deal to Diversify Revenue Sources

Bitcoin mining firm Bitfarms (BITF) has agreed to buy competitor Stronghold Digital for $125 million. The amount includes an assumed debt of $50 million.

Bitcoin mining firm Bitfarms (NASDAQ:BITF) has agreed to acquire rival Stronghold Digital (NASDAQ:SRDG) in a deal valued at $125 million, including $50 million in assumed debt.

The transaction will help Bitfarms diversify its revenue beyond Bitcoin mining, which has seen reduced rewards after April's halving event.

“After three years of ongoing discussions, I am pleased to announce this transformative acquisition, which is a decisive step in securing a strong future for Bitfarms,” said Bitfarms CEO Ben Gagnon in a press release.

Bitfarms to Diversify Revenue Streams

The deal will add 950 Megawatts (MW) to Bitfarms' capacity by 2025, enabling it to generate revenue from other sources such as high-performance computing (HPC) and processing power for AI applications. Bitcoin miners have been ramping up efforts to diversify their income streams by increasing their capacity and adding more energy-efficient rigs.

“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,” added Gagnon.

Stronghold Digital’s CEO, partner, and president commented on the transaction, stating, “We have been in conversation with Bitfarms for a long time. Having received and reviewed numerous bids in our Strategic Alternatives Review process, we believe that we found the ideal partner.”

The transaction is expected to close in the first quarter of 2025. Stronghold shareholders will receive 2.25 shares of Bitfarms for each share of Stronghold, equating to a consideration of $6.02 per share and a 71% premium to the 90-day volume-weighted average price of Stronghold on Nasdaq as of August 16, 2023.

The deal comes as Bitfarms has been the subject of a takeover bid by rival Riot Platforms. Riot has since abandoned its plans to acquire Bitfarms but intends to increase its stake in the company and pursue a takeover. Riot currently owns about 19% of Bitfarms.

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