CleanSpark Inc. (CLSK) entered into a merger agreement on June 27, 2024, to acquire GRIID Infrastructure Inc. (GRDI) in an all-stock deal valued at $155 million.
Deal Structure:
This merger agreement stipulates that GRIID stockholders will receive 0.0631 of a share of CleanSpark common stock at $1.01, representing a discount of 56.84% based on GRIID’s last close, and a 16.09% premium over the 30-day average of GRIID’s stock.
Deal Details and Timeline:
The companies also entered an exclusive hosting deal, under which CleanSpark will immediately get 20 MW of the currently available power from GRIID.
Through this deal, which is expected to close in the third quarter of 2024, CleanSpark expects to grow in Tennessee.
“We anticipate to exceed 100 megawatts in Tennessee by the end of 2024 and eventually grow that to 200 megawatts in 2025 before exceeding 400 megawatts in 2026”, CleanSpark’s CEO Zach Bradford said.
CleanSpark will assume GRIID’s outstanding debt and obligations in the merger. It has provided GRIID with a $5 million working capital loan, and a $50.9 million secured, senior pay-down bridge loan. GRIID’s current Price/Sales (TTM) ratio is 6.54, above the sector median of 2.98.
Unlock premium insights on the CLSK-GRDI m&a deal now @ https://www.insidearbitrage.com/deal-metrics/GRDI/2997/griid-infrastructure-inc-to-be-acquired-by-cleanspark-inc/
Strategic Rationale:
- Expansion in Cryptocurrency Mining: GRIID Infrastructure is known for its advanced and efficient bitcoin mining operations. Acquiring GRIID will enable CleanSpark to scale its mining capacity and increase its share of mined bitcoins, enhancing revenue potential.
- Synergies: The integration of GRIID’s infrastructure with CleanSpark’s existing technologies is expected to create operational efficiencies and cost savings. CleanSpark’s expertise in energy management can optimize GRIID’s mining operations, reducing energy costs and improving profitability.
- Market Positioning: This acquisition strengthens CleanSpark’s position in the rapidly growing cryptocurrency sector, allowing it to capitalize on the increasing demand for bitcoin and other digital assets.
- Sustainability Goals: CleanSpark has been committed to sustainable and efficient energy use. GRIID Infrastructure’s operations, which focus on utilizing renewable energy for mining, align well with CleanSpark’s sustainability objectives.
Industry Context:
The cryptocurrency mining industry has been experiencing significant growth, driven by the rising value of digital currencies like bitcoin. However, it is also facing challenges related to high energy consumption and regulatory scrutiny. Companies like CleanSpark are focusing on sustainable mining practices to address these challenges and improve the environmental impact of mining activities.
Financial Implications:
- Revenue Growth: The acquisition is anticipated to boost CleanSpark’s revenue by increasing its bitcoin mining output.
- Cost Efficiency: Leveraging CleanSpark’s energy management solutions can lower the operational costs of GRIID’s mining facilities, improving overall profitability.
- Shareholder Value: The all-stock nature of the deal is designed to be accretive to CleanSpark’s shareholders, as the combined entity is expected to generate higher earnings and cash flow.
Market Reaction:
The announcement of the acquisition has been met with interest from investors, reflecting confidence in CleanSpark’s strategic direction. Analysts are optimistic about the potential synergies and the positive impact on CleanSpark’s market position and financial performance.
Deal Metrics:
For more details regarding this M&A transaction, please visit the Deal Metrics page here: @ https://www.insidearbitrage.com/2024/06/cleanspark-acquires-griid-infrastructure-in-a-155-million-all-stock-deal/
The Deal Metrics page for each merger or acquisition includes:
– A spread history chart of the merger from announcement through eventual completion or failure. – Every event as the merger progresses through the expiration of the HSR period, various regulatory approvals, shareholder votes, etc. – News and SEC filings. – A history of deal updates. – And a whole lot more.
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Disclaimer: This press release includes forward-looking statements within the meaning of applicable securities laws. Forward-looking statements can generally be identified by the use of words such as "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," "will," or similar expressions. These statements are based on the current expectations and beliefs of CleanSpark Inc. (CLSK) and GRIID Infrastructure Inc. (GRDI) management and are subject to a number of risks, uncertainties, and assumptions that could cause actual results to differ materially from those described in the forward-looking statements.
This content does not constitute financial advice, investment advice, or any other kind of advice, and should not be relied upon as such. Readers are encouraged to conduct their own research and seek professional guidance before making any investment decisions. The completion of the transaction is subject to various conditions, including shareholder and regulatory approvals, and there can be no assurances that the transaction will be completed as described. Neither the author nor the publishing platform assumes any responsibility or liability for any errors or omissions in the content of this press release.
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