LAS VEGAS - CleanSpark Inc. (NASDAQ:CLSK), a sustainable bitcoin mining and energy technology company, announced it has entered into a definitive merger agreement with GRIID Infrastructure Inc. (NASDAQ:GRDI), a vertically integrated bitcoin mining operator. The all-stock merger, valued at $155 million inclusive of debt, is expected to significantly expand CleanSpark's operational capacity in the United States.
Under the terms of the merger, GRIID shareholders will receive shares of CleanSpark common stock, with the exchange ratio based on the aggregate merger consideration divided by the total number of GRIID common stock outstanding as of the closing date. CleanSpark will assume all outstanding GRIID debt and other obligations.
The merger is anticipated to close in the third quarter of 2024, subject to approval by GRIID shareholders and customary closing conditions. CleanSpark has also provided GRIID with a $5 million working capital loan and a $50.9 million bridge loan, which was used to satisfy certain obligations of GRIID at signing.
CleanSpark's CEO Zach Bradford expressed enthusiasm for the merger, anticipating the addition of over 400 MW of infrastructure in Tennessee over the next two years. The company aims to exceed 100 megawatts in Tennessee by the end of 2024 and grow to over 200 megawatts in 2025, eventually exceeding 400 megawatts in 2026. This expansion is expected to support America's technological environment with over 1 GW of premium infrastructure.
GRIID, headquartered in Cincinnati, Ohio, operates bitcoin mining data centers in various locations serviced by the Tennessee Valley Authority. GRIID's CEO Trey Kelly and CSO Harry Sudock have welcomed the merger, highlighting the shared vision and values between the two companies.
The transaction has been unanimously approved by the Boards of Directors of both companies. Legal counsel for CleanSpark was provided by Cozen O'Connor P.C., while Troutman Pepper Hamilton Sanders LLP served as legal counsel for GRIID.
This announcement is based on a press release statement from CleanSpark.
In other recent news, CleanSpark, a U.S.-based bitcoin mining company, has demonstrated significant operational and financial growth. The company's Q2 revenue for fiscal year 2024 reached a record-breaking $111.8 million, a 163% increase from the previous year, with an adjusted EBITDA of $181.8 million. CleanSpark also reported a net income of $126.7 million for the recent quarter, a remarkable turnaround from its net loss of $18.5 million from the previous year.
Cantor Fitzgerald recently assumed coverage on CleanSpark's stock with an Overweight rating and a price target of $27.00, citing the company's efficient mining fleet and strong liquidity position as key factors. The firm anticipates that CleanSpark's aggressive deployment of mining rigs could lead to it achieving the largest hash rate in the industry by the end of 2024.
Furthermore, CleanSpark has been active in mergers and acquisitions, with plans to finalize the acquisition of a site in Wyoming. It also completed grading and received building permits for its Dalton expansion, which is expected to operate at a capacity of 2.4 EH/s.
CleanSpark plans to increase its hashrate to 50 exahash per second by 2025, indicating a commitment to further growth and operational efficiency. These are the recent developments in CleanSpark's business operations and financial performance.
InvestingPro Insights
CleanSpark Inc. (NASDAQ:CLSK) has made a strategic move to enhance its bitcoin mining and energy technology footprint through the merger with GRIID Infrastructure Inc. In light of this development, examining CleanSpark's financial metrics and projections offers valuable context for investors.
As of the last twelve months leading up to Q2 2024, CleanSpark has demonstrated robust revenue growth, boasting an impressive 122.34% increase. This growth trajectory is further underscored by the company's substantial gross profit margin, which stands at 59.71%, indicating a strong ability to translate sales into profit.
Despite recent price volatility, with a 16.12% decline over the last week and a 30.42% drop over the past three months, CleanSpark's year-to-date price total return has surged by 45.78%. This suggests that while the company's stock price has faced short-term pressures, its performance over the year has been notably strong. Moreover, CleanSpark is trading at a P/E ratio of 43.31, which, when paired with its high earnings growth, results in a PEG ratio of just 0.47, potentially signaling an attractive investment opportunity relative to its future earnings growth.
Investors seeking further analysis will find additional insights with InvestingPro Tips. For instance, CleanSpark holds more cash than debt on its balance sheet, providing financial stability and flexibility. Analysts expect both net income and sales to grow this year, painting a promising picture for the company's profitability.
With 16 more InvestingPro Tips available, investors can gain a comprehensive understanding of CleanSpark's performance and outlook. Remember, you can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro, further enriching your investment strategy with valuable insights.
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