Crypto miner Bitfarms (BITF) is set to buy rival Stronghold Digital (SDIG) in a deal worth about $175 million ($125 million in equity and $50 million in debt). This acquisition will increase Bitfarms’ hashrate by 4 exahashes per second (EH/s)—which measures how quickly mining operations can solve complex calculations—and will add 165 megawatts (MW) of power capacity. Despite this news, Bitfarms shares are down at the time of writing.
Bitfarms CEO Ben Gagnon called the acquisition a game-changer. In fact, he said it will help the company diversify beyond just Bitcoin mining and create more long-term value by integrating power generation and expanding its energy trading capabilities.
This deal has been approved by the boards of both companies and is expected to close in the first quarter of next year if it receives regulatory approvals. Stronghold shareholders will receive 2.52 shares of Bitfarms for each share they own, which is a 71% premium over Stronghold’s recent average price. Interestingly, this merger comes as Bitfarms is facing a hostile takeover attempt from Riot Platforms (RIOT), which recently increased its stake in Bitfarms to 18.9% after a $950 million takeover bid earlier this year was withdrawn.
Is Bitfarms Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on Bitfarms stock based on five Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 75% rally in its share price over the past year, the average Bitfarms price target of $4.47 per share implies almost 100% upside potential.
