Analysts at HC Wainright believe CleanSpark’s latest acquisition is bullish, anticipating the potential for the price to rise to $27.
On Thursday, CleanSpark (Klask) has entered into a definitive agreement to acquire GRIID Infrastructure (ugly) in an all-stock deal valued at $155 million.
Final terms are still pending, but HC Wainright’s initial estimates suggest CleanSpark could pay about $86 million, in line with GRIID’s market capitalization as of June 27. This acquisition will require CleanSpark to issue 5.2 million shares, approximately 2.5% of its total shares. Assuming the stock price is $16,587.
Analysts at HC Wainright expect “the transaction will accelerate CleanSpark’s development of high-quality, relatively low-cost energy infrastructure in the coming years, as we reiterate our Buy rating.”
CleanSpark assumes all GRIID debt and other liabilities. To assist GRIID during the transition period, CleanSpark provided a $5 million working capital loan and a $50.9 million paid-off bridge loan. These loans are secured and have seniority over GRIID’s other debts.
CleanSpark is currently trading at $16.23 per share.
Conditions for obtaining energy
Despite the higher-than-average cost of one megawatt in recent transactions, CleanSpark sees GRIID’s massive energy pipeline in Tennessee as a strategic asset. The department expects to add more than 400 megawatts of data center infrastructure in Tennessee over the next two and a half years, with plans to bring 100 megawatts online by the end of 2024 and 200 megawatts by 2025.
Combined with its current capacity of 450 MW and other expansion projects, CleanSpark is trying to achieve more than 1 GW of total infrastructure capacity by 2026.
The acquisition, scheduled to close in the third quarter of 2024, is subject to GRIID shareholder approval and other conditions.