The companies also revealed that they entered an exclusive hosting agreement for all currently available power, of which 20 MW will be allocated to CleanSpark effective immediately.

This development arrives as BTC miners significantly struggle following the recent halving event that impacted their earnings. As a result, several miners have begun efforts to diversify their revenue streams by mining altcoins and pivoting towards AI.

Acquisition details

Under this deal, CleanSpark will take on all of GRIID’s existing debt and obligations. Additionally, the miner has provided GRIID with a $5 million working capital loan and a bridge loan of about $50.9 million to cover certain obligations at the time of signing.

CleanSpark CEO Zach Bradford stated that this acquisition would help the firm replicate its success in Georgia over the next three years in Tennessee. He commented:

“[This acquisition] will enable us to exceed 100 megawatts in Tennessee by the end of this year and grow to 200 megawatts in 2025, eventually surpassing 400 megawatts in 2026.”

Both companies’ Boards of Directors have unanimously approved the transaction, which is expected to close in the third quarter of 2024. However, the acquisition still requires approval from GRIID shareholders and must meet other customary closing conditions.

When the deal is completed, GRIID shareholders will receive CleanSpark common stock. The exchange ratio will be calculated by dividing the total merger consideration by the number of GRIID common shares outstanding at the merger’s closing.

GRIID was established in 2018 and subsequently began mining in 2019. The company runs four mining facilities in Watertown, New York, and Limestone, Maynardville, and Lenoir City, Tennessee. Additionally, it has a Research and Development Center in Austin, Texas, and a Development, Deployment, and Equipment Repair Center in Rutledge, Tennessee.

Following the news, GRIID shares fell around 50%, while CleanSpark’s rose nearly 4%.