CleanSparks purchase of GRIID confirms CLSK as a recommended buy says analyst

CleanSpark’s acquisition of GRIID Infrastructure in an all-stock deal valued at $155 million has H.C. Wainright analysts bullish on the company’s potential, projecting an upside to $27. While final terms are still pending, initial estimates suggest CleanSpark may pay around $86 million, aligning with GRIID’s market cap as of June 27. The acquisition will require CleanSpark to issue 5.2 million shares, approximately 2.5% of total shares assuming a share price of $16.587. H.C. Wainright analysts expect the deal to significantly accelerate CleanSpark’s development of high-quality, low-cost power infrastructure. CleanSpark will be taking on all of GRIID’s debt and other responsibilities. To help during the transition, CleanSpark has given a $5 million working capital loan and a $50.9 million pay-down bridge loan. Despite the higher-than-average cost per MW of recent transactions, CleanSpark sees GRIID’s substantial energy pipeline in Tennessee as a strategic asset. The company anticipates adding over 400 MW of data center infrastructure in Tennessee by the end of 2024 and 200 MW by 2025, with plans to achieve over 1 GW of total infrastructure capacity by 2026. The acquisition is set to close in Q3 2024, subject to GRIID shareholder approval and other conditions. CleanSpark is currently traded at $16.23 per share.