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Bitcoin (BTC) mining company Bitfarms Ltd. has agreed to acquire Stronghold Digital Mining Inc. for about $125 million in stock, as reported by Bloomberg. The deal comes as Bitfarms fends off a takeover attempt by Riot Platforms Inc.

Under the terms of the agreement, Stronghold shareholders will receive 2.52 Bitfarms shares for each share they own, representing a premium of approximately 70% to Stronghold’s 90-day volume-weighted average price on the Nasdaq as of August 16. The transaction also includes approximately $50 million in assumed debt.

The acquisition is intended to increase Bitfarms’ mining capacity by providing greater access to electricity through Stronghold, which has its own power plant and connections to local grids and burns coal to generate energy for its mining operations.

The deal also comes against the backdrop of Riot Platforms’ unsolicited $950 million bid to buy Bitfarms, which the company rejected in April. In response, Bitfarms adopted a “poison pill” defense strategy, scheduling a special shareholders meeting for Oct. 29 to discuss Riot’s attempt to replace three board members.

Bitfarms reported $41.5 million in revenue for the second quarter, while Stronghold reported a loss of $21.3 million on revenue of $19.1 million. Riot, one of the world’s largest Bitcoin mining companies, had $70 million in revenue in the same period.

The move comes as the crypto mining sector faces potential revenue challenges following the Bitcoin halving, which reduced daily mining rewards. Miners are looking to expand through acquisitions to mitigate this impact.

Blooming hashrate

Riot announced in July that its hashrate grew by 50% between May and June of this year, reaching 22 exahashes per second (EH/s). Notably, this is 106% higher than the 10.7 EH/s recorded last year.

Additionally, the company recorded a 19% monthly increase in Bitcoin produced in June, though the amount is still 45% lower than in 2023. According to the same report, Riot now owns 9,334 BTC.

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