CleanSparks purchase of GRIID emphasizes CLSK as a recommended buy analyst says
CleanSpark’s recent acquisition of GRIID Infrastructure in an all-stock deal valued at $155 million has received a positive outlook from analysts at H.C. Wainright. They project a potential upside of $27 for CleanSpark. Although the final terms are still pending, initial estimates suggest that CleanSpark might pay around $86 million for the acquisition, aligning with GRIID’s market cap as of June 27. This would require CleanSpark to issue 5.2 million shares, which amounts to approximately 2.5% of its total shares, assuming a share price of $16.587.
The analysts at H.C. Wainright expect this deal to significantly accelerate CleanSpark’s development of high-quality and cost-effective power infrastructure in the coming years, which is why they reiterate their Buy rating. CleanSpark has also taken 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.
Currently, CleanSpark is trading at $16.23 per share. Despite the higher-than-average cost per megawatt of recent transactions, CleanSpark sees GRIID’s substantial energy pipeline in Tennessee as a strategic asset. The company plans to add over 400 MW of data center infrastructure in Tennessee within the next two and a half years, with the goal of bringing 100 MW online by the end of 2024 and 200 MW by 2025. When 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 is set to close in Q3 2024, subject to GRIID shareholder approval and other conditions.
