Bitcoin miner Bitfarms to acquire Stronghold Digital in $175 million equity and debt deal

Bitcoin mining company Bitfarms (ticker: BITF) has agreed to acquire rival Stronghold Digital (ticker: SDIG) in a $175 million stock and debt-financed deal. Both firms’ boards of directors “unanimously approved” the buyout, which is expected to close in the first quarter of 2025.

Both companies will merge their stocks in a $125 million equity transaction, and Bitfarms will assume $50 million worth of Stronghold’s debt. Bitfarms is paying a 71% premium on the Stronghold stock’s 90-day volume-weighted average price as of Aug. 16. Stronghold shareholders will receive 2.52 shares of Bitfarms’ BITF for each share they own.

SDIG is trading up more than 70% in Wednesday's trading session while BITF is down 5% as of press time.

The deal comes amid a period of uncertainty for many bitcoin miners around the world impacted by the fourth Bitcoin halving that reduced their revenues. Several companies are looking to better compete by expanding their businesses, mining fleets and geographic presence in addition to expanding into adjacent industries like high-performance computing.

For example, one of the largest U.S. bitcoin miners, Riot, has been mounting a takeover bid of Bitfarms — the latter of which reported a net loss of $27 million last quarter. Riot has purchased nearly 20% of Bitfarms' stock, making it the largest shareholder, and nominated three independent directors to the board to replace a Bitfarms' co-founder.

“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,” Bitfarms CEO Ben Gagnon said in the 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.”

Bitfarms, founded in 2017 and currently operating 12 bitcoin mining facilities in four countries Canada, the United States, Paraguay and Argentina, will subsume Stronghold’s two “tier two” merchant power plants in Pennsylvania.