Bitfarms completes acquisition of its digital mining operations, sells Paraguayan facility to HIVE in the United States

According to The Block, Bitfarms has completed the acquisition of Bitcoin miner Stronghold Digital, further expanding its business layout in the United States through stock-for-stock merger.

Meanwhile, Bitfarms also completed the sale of its 200-megawatt (MW) facility in Paraguay to HIVE Digital for $56 million.

Bitcoin mining and data center company Bitfarms has completed acquisition Stronghold Digital.

The stock-for-stock merger deal was initially announced in August last year, with a valuation of $175 million, and is expected to be completed in the first quarter of 2025. However, the specific valuation at the time of Monday's completion was not disclosed.

According to the terms of the transaction, for each share of Stronghold stock held, shareholders of Stronghold will receive 2.52 shares of Bitfarms stock, making Stronghold a wholly-owned subsidiary of Bitfarms. In this merger, approximately 59,678,164 shares of Bitfarms common stock and 10,574,848 Bitfarms warrants were issued. In addition, $44.5 million was paid at the time of the merger to settle Stronghold's outstanding loans, and Stronghold's common stock ceased trading on the Nasdaq.

This transaction has increased Bitfarms' hash rate to 18 EH/s, expanded its energy mix to 623 MW under management, and ensured a 1.1 GW growth pipeline in Pennsylvania, the company said, adding that this change has rebalanced Bitfarms' operations, with 80% market share in North America and 20% in international markets by the end of the year. In addition, this also provides favorable conditions for Bitfarms to further advance its high-performance computing (HPC) and artificial intelligence (AI) hosting strategy.

Bitfarms CEO Ben Gagnon said,"The completion of this strategic acquisition further expands our US business footprint, positioning us as an industry leader in the PJM market. With Stronghold's power asset portfolio, combined with our operational expertise and financial strength, we aim to create long-term value for shareholders by executing our US strategy and developing a scalable HPC/AI business."

According to the data on Bitfarms stock page by The Block, Bitfarms' stock fell 0.9% on Monday, closing at $1.10, with a market capitalization of $543.2 million.

Bitfarms will sell its 200 MW Paraguay facility for a total transaction value of 85 million US dollars

After the merger of Bitfarms and Stronghold, HIVE Digital announced on Tuesday that it has completed the $56 million acquisition of Bitfarms' 200 MW hydroelectric power facility in Yguazú, Paraguay. The transaction also includes approximately $19 million in prepaid electricity repayment obligations and $10 million in remaining capital commitments such as construction costs.

This acquisition has expanded HIVE's mining capacity by 317% to 6 EH/s, expected to reach 25 EH/s by September, including its other facilities in Canada and Sweden.

HIVE's leadership met with Paraguayan President Santiago Peña and other political leaders in January to gain support for its sustainable growth commitment in Paraguay, and subsequently signed a binding letter of intent for the acquisition of Bitfarms facilities. Upon completion of the transaction, HIVE's operational capacity in Paraguay will reach 300 MW, following the 100 MW mining facility announced last July.

Yguazú facilities are being developed in two phases, with the first phase 80% complete and scheduled to be finished in April, adding 6 EH/s of capacity. The second phase is expected to be completed in August, further increasing the hashing power by 6.5 EH/s through water-cooled ASIC. HIVE expects the total net cost of completing the facility to be $400,000 per MW.

HIVE CEO and Chief Executive Officer Aydin Kilic said, "Our top priority is to create value for our shareholders while promoting local sustainable growth. This acquisition allows us to expand our capacity from 6 EH/s to 25 EH/s by 2025, while maintaining one of the most energy-efficient operations in the industry. In addition to the technical aspects, we are also committed to investing in Paraguay's infrastructure, supporting education, and creating high-quality local employment opportunities."

In July 2023, HIVE Digital changed its name from HIVE Blockchain Technologies, marking its diversified transformation towards AI computing data center hosting.