CleanSpark, a prominent publicly traded Bitcoin mining firm, recently announced the acquisition of one of its smaller competitors, GRIID Infrastructure, in an all-stock deal worth $155 million. This acquisition immediately brings 20 megawatts (MW) of additional power to CleanSpark for its mining operations. In addition, another 400 MW of power is expected to be added in Tennessee over the next two years as part of the merger agreement. CleanSpark has taken on all debts and obligations from GRIID, including providing a $5 million working capital loan and paying down a bridge loan of $50.9 million.
CleanSpark’s CEO, Zach Bradford, expressed confidence in the acquisition, stating, “This acquisition would give us a clear and steady path over the next three years to accomplish in Tennessee what we proudly achieved in Georgia over the past three years. That achievement was to build out over 400 MW of infrastructure backed by valuable, long-term power contracts.”
Market Response
Following the announcement of the acquisition, GRIID’s shares plummeted more than 50%, while CleanSpark’s shares experienced a 4% increase. This reaction from traders indicates that the merger agreement was perceived as a fire sale. CleanSpark’s shares closed at $16.05 apiece, resulting in a market cap of $3.6 billion for the firm. Despite the market reaction, CleanSpark has been one of the best-performing mining stocks this year, with a 47% increase in value.
CleanSpark is not the only mining firm making strategic moves in the market. Riot Platforms has been pursuing a hostile takeover of Bitfarms, offering $2.30 per share. Bitfarms initially rejected the offer, leading to tensions between the two companies. As of Thursday, Bitfarms closed at $2.59 per share, while Riot Platforms saw an 11% decline in share value. Additionally, Core Scientific, which recently emerged from bankruptcy, is considering a potential $1 billion buyout offer from CoreWeave, a cloud computing firm, resulting in a 92% increase in share value for Core Scientific.
The acquisition of GRIID Infrastructure by CleanSpark marks a significant development in the Bitcoin mining industry. The addition of more power and infrastructure is expected to bolster CleanSpark’s operations in the coming years. As competition among mining firms heats up, strategic acquisitions and partnerships will continue to play a key role in shaping the industry landscape.
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