Bitcoin miner CleanSpark to acquire GRIID in a $155M all-stock deal

In a strategic move to bolster its infrastructure and expand its capacity, Bitcoin miner CleanSpark Inc. (NASDAQ: CLSK) has announced that it will acquire GRIID Infrastructure Inc. (NASDAQ: GRDI) in an all-stock transaction valued at $155 million.

This acquisition, which includes the assumption of GRIID’s debt, is set to significantly enhance CleanSpark’s operational capacity and market presence, particularly in Tennessee.

Details of the acquisition deal

CleanSpark’s acquisition of GRIID Infrastructure marks a significant milestone in its expansion strategy. The deal comes on the backdrop of CleanSpark stock outperforming Bitcoin with 310% stock surge driven by strategic acquisitions and operational expansion. 

The GRIID acquisition deal, which involves an all-stock transaction, values GRIID at $155 million, inclusive of debt assumption.

GRIID stockholders will receive shares of CleanSpark common stock based on an exchange ratio calculated by dividing the aggregate merger consideration by the total number of GRIID’s outstanding shares at the closing date.

This ratio considers CleanSpark’s common stock valuation of $16.587 per share, which reflects the volume-weighted average price over the two consecutive trading days prior to the merger agreement.

As part of the agreement, CleanSpark will assume all of GRIID’s outstanding debts and obligations. To support GRIID during the transition, CleanSpark has provided a $5 million working capital loan and a $50.9 million pay-down bridge loan.

These loans, which are secured and senior to other debts, were crucial in settling GRIID’s immediate obligations at the time of signing.

The Boards of Directors of both companies have unanimously approved the merger, which is expected to close in the third quarter of 2024, subject to shareholder approval and customary closing conditions.

CleanSpark plans to exceed 1GW capacity

One of the most compelling aspects of GRIID’s acquisition is the significant expansion of CleanSpark’s operational capacity.

The deal is expected to add over 400 megawatts (MW) of power in Tennessee over the next two years. This expansion aligns with CleanSpark’s broader goal of exceeding 1 gigawatt (GW) of total announced, planned, and owned capacity.

CleanSpark’s CEO, Zach Bradford, highlighted the strategic importance of this acquisition, drawing parallels to the company’s successful expansion in Georgia.

Bradford expressed confidence that the integration of GRIID’s assets would enable CleanSpark to replicate its achievements in Tennessee, where the company aims to exceed 100 MW by the end of 2024, grow to 200 MW in 2025, and surpass 400 MW by 2026.

GRIID’s CEO, Trey Kelly, and Chief Strategy Officer, Harry Sudock, echoed this optimism. They emphasized the synergistic potential of the merger, noting that CleanSpark’s disciplined execution and shared vision make for an ideal partnership.

This acquisition is poised to leverage GRIID’s established infrastructure and CleanSpark’s operational expertise to foster rapid growth in the Tennessee Valley.

GRIID currently operates several Bitcoin mining data centers across Tennessee, supported by the Tennessee Valley Authority (TVA), a major public power provider in the United States.

These facilities, coupled with GRIID’s R&D center in Austin, Texas, and equipment repair center in Rutledge, Tennessee, provide a robust foundation for future expansion.

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