TeraWulf’s (TeraWulf Stock Quote, Chart, News, Analysts, Financials NASDAQ:WULF) acquisition of Beowulf Electricity & Data removes a long-standing overhang tied to its related-party structure and strengthens its positioning for future growth, said ATB Capital Markets analyst Martin Toner in a May 27 note.
The $52.4-million deal consolidates operations under one roof, ends a legacy services agreement, and enhances governance, moves that Toner believes will boost investor confidence and unlock value in TeraWulf’s high-performance computing ambitions.
He is maintaining his “Outperform” rating and target of US$9.00.
TeraWulf builds and runs eco-friendly data centers in the U.S. for Bitcoin mining and high-performance computing. Its main site, Lake Mariner in New York, uses mainly hydro and nuclear power. Beowulf Electricity & Data Inc., based in Easton, Maryland, is a private energy and digital infrastructure firm that develops, builds, and operates large-scale power and data projects across North America.
After markets closed on May 27, TeraWulf announced it would acquire all of Beowulf Electricity & Data LLC for \$52.4 million, including \$3 million in cash and 5 million shares. Beowulf, owned by TeraWulf CEO Paul Prager, previously operated under a services agreement with the company, receiving \$15.8 million in 2024. That agreement will now be terminated, and 94 Beowulf employees will join TeraWulf. Management said the deal simplifies the corporate structure, ends a related-party relationship, and brings in Beowulf’s power development expertise.
“We are constructive on the announcement, as we believe that eliminating related-party disclosures associated with Beowulf removes an overhang on the stock, will improve the ability to project finance, enhances the HPC story and opens WULF up to new investors,” Toner said.
The total deal value is about $52.4-million, which Toner believes reflects the present value of milestone-based payments outlined in the original service agreement dating back to TeraWulf’s IPO.
“The deal consists of $3mm in cash and 5mm shares of TeraWulf common stock,” he said. “The agreement also includes up to $19mm in contingent cash payments and up to $13mm in additional common stock, subject to the ‘achievement of key milestones.’ We believe the milestones relate to the energization of data center assets, leases and project finance.”
Kerri Langlais, Chief Strategy Officer of TeraWulf, said in a May 27 announcement that the acquisition will consolidate the company’s operations under a single, unified structure.
“It enhances transparency, strengthens governance, and provides greater strategic flexibility as we pursue long-term growth and value creation,” she said. “With all employees operating under one roof, we are well-positioned to scale our next-generation infrastructure and support the evolving demands of AI and high-power compute workloads.”
Toner said ATB remains bullish on TeraWulf.
“In our view, the announcement should benefit the stock, allowing investors to focus on the HPC story on hand (which we see as the main driver of the name moving forward).”
He said ATB likes the pace of HPC execution so far. Following the Q1 release, ATB believes investors should be more confident that WULF will raise project financing, expand its agreement with Core42, and secure additional counterparties, which management is actively pursuing.
“Once CB1 is energized, we think sentiment around the stock will shift from a ‘show me’ story to one that is rooted in execution, which could boost the value the market assigns for WULF’s HPC operations (which we think remains underappreciated).”
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About The Author /
Rod Weatherbie is a journalist based in Prince Edward Island. Since 2004, he has written extensively about the Canadian property and casualty insurance landscape. He was also a founder and contributing editor for a Toronto-based arts website and a PEI-based food magazine. His fiction and poetry have been featured in The Fiddlehead, The Antigonish Review, and Juniper.
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