CleanSpark acquiring GRIID Infrastructure in $155 Million all-stock deal

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As a seasoned crypto investor with a deep understanding of the Bitcoin mining industry, I view CleanSpark’s (CLSK) acquisition of GRIID Infrastructure (GRIID) as an intriguing development. The $155 million all-stock deal, which includes debt assumption and an exclusive hosting agreement, represents a strategic move for both parties involved.

As a researcher studying publicly traded companies, I’ve come across some intriguing news regarding CleanSpark Inc. (CLSK). They’ve recently announced a merger agreement under which they will acquire GRIID Infrastructure in an all-stock transaction worth approximately $155 million.

In the course of this acquisition, I am responsible for the payment and assumption of GRID’s existing debts as part of the deal. Concurrently, an exclusive hosting agreement has been reached between CleanSpark and GRID, granting CleanSpark immediate access to 20 MW of power.

Both companies’ Board of Directors have given their universal agreement for the merger. The deal is projected to be completed in the third quarter of 2024, contingent upon GRIID shareholders’ approval and customary conditions.

Agreement terms

According to the agreement, GRIID shareholders will be given CleanSpark common shares in return, with the number of shares received being determined by the exchange ratio calculated from the total consideration paid for the merger.

As a crypto investor, I can explain this situation by saying that the merger between GRIID and CleanSpark comes with the settlement of GRIID’s existing debts and an assessment of $16.587 for each CleanSpark common share. Currently, CleanSpark’s stock is available in the market for $16.35 per share.

CleanSpark is assuming all of GRIID’s debts and related obligations. To facilitate GRIID’s transformation, CleanSpark has extended a $5 million working capital loan and a $50.9 million pay-down bridge loan. These loans are collateralized and take priority over GRIID’s existing debts.

Zach Bradford, the CEO of CleanSpark, showed great excitement about the upcoming merger, emphasizing the significant expansion opportunities that lie ahead in Tennessee.

Bradford expressed that this acquisition will provide us with a well-defined and unwavering route to replicate in Tennessee the successful feat we accomplished in Georgia: constructing more than 400 MW of infrastructure supported by lasting power agreements.

Bradford indicated intentions to surpass 100 MW in Tennessee by the end of 2024, aiming for expansion to 200 MW in 2025, and further growth to over 400 MW by 2026.

GRIID’s tumultuous stock movement 

Griid was a vertically integrated Bitcoin (BTC) mining company that owned energy infrastructure and high-density data centers in North America, mainly in Tennessee. The company stock has had a tumultuous week. 

Last week, GRDI began trading at $1.17 per share. In just three days, its stock price surged over 150%, reaching heights above $3 per share by Wednesday. However, following the announcement of this acquisition, GRDI’s shares have retreated and are now back at approximately $1.20 per share.

GRIID runs Bitcoin mining data centers in Tennessee, powered by the Tennessee Valley Authority. The company’s mining activities also take place in Watertown, New York, as well as several sites in Tennessee. There are also facilities in Ohio and Texas where GRIID carries out its operations.

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2024-06-27 18:28