Bitfarms to Acquire Stronghold Digital Mining

Core Viewpoint - Bitfarms Ltd. is acquiring Stronghold Digital Mining, Inc. in a stock-for-stock merger valued at approximately US$125 million, which includes the assumption of US$50 million in debt, aiming to enhance its energy portfolio and operational capacity in Bitcoin mining [2][10]. Group 1: Transaction Overview - The merger agreement will allow Bitfarms to expand its energy portfolio to over 950 MW by the end of 2025, with nearly 50% of this capacity located in the U.S. [5][6]. - Stronghold has a current hashrate of 4.0 EH/s and the potential to increase it to approximately 10 EH/s by 2025 through fleet upgrades [3][5]. - The transaction is expected to generate approximately US$10 million in annual run-rate cost synergies [11]. Group 2: Strategic Benefits - The acquisition will vertically integrate Bitfarms into power generation, adding 165 MW of nameplate generated power capacity and 142 MW of current PJM import capacity, with potential expansion up to 790 MW [4][5]. - The combined company will leverage Stronghold's reclamation facilities, which have significant environmental benefits, including the potential to capture over 60,000 tons of carbon dioxide annually [7][8]. - The strategic location within the PJM grid provides opportunities for competitive power generation and utilization for Bitcoin mining and energy trading [4][5]. Group 3: Shareholder Impact - Stronghold shareholders will receive 2.52 shares of Bitfarms for each share they own, representing a 71% premium based on the 90-day volume-weighted average price [10]. - Upon closing, Stronghold shareholders are expected to own just under 10% of the combined company [10]. Group 4: Future Outlook - The merger is anticipated to close in the first quarter of 2025, subject to shareholder and regulatory approvals [9]. - Bitfarms aims to achieve multi-year expansion capacity up to 1.6 GW, significantly increasing its operational footprint in the U.S. [6][9].