Stronghold Digital Mining (SDIG.US) was acquired by Bitfarms (BITF.US) for $165 million, with the stock opening up more than 70% higher.

Canada's Bitcoin mining company Bitfarms (BITF.US) will acquire Stronghold Digital Mining (SDIG.US) for about $165m, and fend off a hostile takeover bid from Riot Platform (RIOT.US). The deal includes $125m in equity value and about $50m in debt, and is expected to deliver about $10m in annual cost synergies.

Bitfarms reported second-quarter revenue of $41.5m, and will boost its mining capacity by providing more power. The deal is expected to close in the first quarter of 2025.

Stronghold owns a power plant in Pennsylvania and went public in October 2021, raising $127m in its initial public offering (IPO). As of June 30, 2024, Stronghold had 4.0 EH/s of hash power and 165 MW of generation capacity, and could potentially increase its hash power to about 10 EH/s in 2025.

Stronghold shareholders will receive 2.52 shares of Bitfarms stock for every share of Stronghold stock, at a price of $6.02 per share, a 71% premium to the Nasdaq 90-day volume-weighted average price of $3.51 as of August 16, 2024.

As of the time of writing, Bitfarms was down 4.66%, while Stronghold Digital Mining was up more than 70%.