CleanSpark to Acquire GRIID in $155 Million Stock Deal

In a significant development in the cryptocurrency mining sector, CleanSpark, a prominent Bitcoin (BTC) miner, has completed a merger with GRIID Infrastructure in a deal valued at $155 million.

The transaction, which was formally announced on June 27, involves CleanSpark acquiring all issued and outstanding common stock of GRIID through an all-stock agreement.

Financial Arrangements and Operational Expansion

As part of the arrangement, CleanSpark will also take on all existing debts of GRIID and has entered into an exclusive hosting agreement that provides 20 megawatts of power to the merged entity.

Further supporting the integration and expansion of GRIID, CleanSpark has facilitated a $5 million working capital loan alongside $50.9 million to settle immediate financial commitments of GRIID.

This merger is expected to significantly boost CleanSpark’s operational capacity, promising an addition of more than 400 MW of power over the next few years. Zach Bradford, CEO of CleanSpark, expressed confidence in the merger’s potential to scale the company’s operations.

He projects that the company’s Tennessee facilities will reach a capacity of 100 megawatts by the end of this calendar year, with an aim to grow to 200 megawatts by 2025 and surpass 400 megawatts by 2026.

Emphasizing the collaborative approach, Bradford noted, “At every step of the way we will continue to work together with local communities as we build infrastructure capable of powering as much as one gigawatt of data center operations in Tennessee.”

The merger’s announcement was well-received in the financial markets, with CleanSpark’s stock, traded under the symbol CLSK, rising 2.2% to $16.44 on the announcement day, culminating in a year-to-date gain of over 50%.

Prior to the merger, GRIID managed two mining facilities in East Tennessee and a co-located site in New York, combining for a total mining capacity of 68 MW, most of which is situated in Tennessee.

Headquartered in Cincinnati, Ohio, GRIID had already set plans earlier this year to elevate its mining capacity in the Tennessee Valley to nearly 150 MW.

Trey Kelly, CEO of GRIID, commented on the expansion: “We’re focused on building our growth and expanding our capacity by moving sites like this from our power pipeline to production. We’re especially pleased to be expanding our footprint in the Tennessee Valley, where the Tennessee Valley Authority’s (TVA) mix of affordable, reliable, and low-carbon electricity has made this area an excellent long-term location to mine bitcoin.”

Local Support and Industry Trends

Local government officials have also voiced support for GRIID’s expansion.

Tony Aikens, the mayor of Lenoir City, praised GRIID for its positive impact on the community, stating, “Bitcoin has been a net benefit for the city and for our state, generating tax receipts and good jobs. We look forward to GRIID being our neighbors for many years to come.”

The consolidation and expansion trend is not unique to CleanSpark and GRIID, as the broader Bitcoin mining industry continues to evolve.

Marathon Digital, another significant industry player, enhanced its operational capacity by acquiring two mining sites from Generate Capital in December, which is expected to double its hashrate within two years.

Furthermore, earlier this month, CleanSpark added to its portfolio by acquiring five mining facilities in Georgia, injecting an additional 60 MW of power into its operations.

In a bold move to secure further capital for expansion, CleanSpark disclosed in a March Securities and Exchange Commission filing its intent to sell up to $800 million of its stock.

Established in 2018, GRIID Infrastructure (GRDI) achieved a public listing on the Nasdaq exchange earlier in 2024. This accomplishment followed a period of postponed plans due to challenging market conditions within the cryptocurrency sector.

This flurry of activity underscores a period of aggressive growth and strategic realignment within the Bitcoin mining industry, as companies like CleanSpark and GRIID position themselves to capitalize on the evolving digital currency landscape.