Analysts at H.C. Wainright have a positive outlook on CleanSpark’s latest acquisition, forecasting a potential increase to $27.

CleanSpark’s Acquisition of GRIID Infrastructure

On Thursday, CleanSpark (CLSK) entered into a definitive agreement to acquire GRIID Infrastructure (GRDI) through an all-stock deal valued at $155 million. While final terms are still under review, initial estimates by H.C. Wainright suggest CleanSpark might pay around $86 million, aligning with GRIID’s market cap as of June 27. This acquisition will require CleanSpark to issue 5.2 million shares, approximately 2.5% of its total shares, assuming a share price of $16.587.

Analysts at H.C. Wainright expect the deal to significantly accelerate CleanSpark’s development of high-quality and relatively low-cost power infrastructure in the coming years, as they reiterate their Buy rating.

CleanSpark is taking on all of GRIID’s debt and other responsibilities. To assist GRIID during the transition, CleanSpark has provided a $5 million working capital loan and a $50.9 million pay-down bridge loan. These loans are secured and have seniority over GRIID’s other debts.

CleanSpark is currently traded at $16.23 per share.

Energy Acquisition Terms

Despite the higher-than-average cost per megawatt (MW) of recent transactions, CleanSpark views GRIID’s substantial energy pipeline in Tennessee as a strategic asset. The management anticipates adding over 400 MW of data center infrastructure in Tennessee within the next two and a half years, with plans to bring 100 MW online by the end of 2024 and 200 MW by 2025.

Combined with its existing 450 MW capacity and other expansion projects, CleanSpark aims to achieve over 1 GW of total infrastructure capacity by 2026.

The acquisition, set to close in Q3 2024, is subject to GRIID shareholder approval and other conditions.

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