en.Wedoany.com Reported - Kraken Robotics Inc. (TSX-V: PNG, OTCQB: KRKNF) completed the acquisition of Covelya Group Limited on July 2, 2026, for approximately $615 million CAD. The acquisition was completed through a combination of cash and stock consideration, with the cash portion totaling approximately $480 million CAD and the stock portion consisting of approximately 15.88 million common shares issued at $8.50 CAD per share, valued at approximately $135 million CAD. Following the acquisition, Kraken will integrate the product portfolios and customer resources of both companies in the underwater technology sector, serving both civilian and military markets.
Kraken Robotics is a global marine technology company that develops sensors, software, and integrated systems for the defense, offshore energy, and marine science markets. CEO Greg Reid stated that this acquisition positions the company as a comprehensive supplier in the underwater intelligence solutions field. With the acquisition of Covelya Group, Kraken has gained multiple brands including Sonardyne, EIVA, Forcys, Voyis, and Chelsea Technologies, which have engineering teams distributed globally, focusing on dual-use technologies for both civilian and military applications. Against the backdrop of rising global defense budgets, Kraken is poised to benefit from increased investment in autonomous underwater systems.
Strategic advantages from the acquisition include strengthening customer relationships in the rapidly growing defense and maritime surveillance markets, enriching the underwater technology product line, expanding geographic coverage, and integrating engineering teams and facilities. Kraken expects to achieve approximately $10 million CAD in cost synergies within 24 months of closing the transaction. Additionally, the acquisition is expected to contribute low-to-mid double-digit percentage growth to earnings per share in 2027.
Since the release of first-quarter results on May 28, 2026, Kraken and Covelya have secured approximately $13 million CAD and $17 million CAD in new product orders, respectively. As of the closing of the acquisition, Kraken's order book for 2026 stood at approximately $110 million CAD, while Covelya Group's order book was $182 million CAD. Accordingly, Kraken has revised its fiscal 2026 financial outlook to include Covelya's performance expectations for the first time. The new outlook indicates combined revenue in the range of $290 million CAD to $320 million CAD, adjusted EBITDA in the range of $65 million CAD to $75 million CAD, and an adjusted EBITDA margin between 22% and 23%. For capital expenditures/intangible assets, the actual figure for 2025 was $30.294 million CAD, with the new outlook ranging from $27 million to $33 million CAD. The majority of revenue is expected to be realized in the second half of the year. Actual combined revenue for 2025 was $102 million CAD, with adjusted EBITDA of $24.69 million CAD.
In terms of management team and organizational structure, Kraken will operate based on two separate entities: Kraken Group, responsible for finance and governance, and Kraken Robotics, responsible for operations. Bernard Mills has been appointed President of Kraken, having previously served as CEO of Stelia North America (an advanced materials subsidiary of Airbus Group) and President of Ultra Sonar Systems. The Kraken Group leadership team includes CEO Greg Reid, President Bernard Mills, CFO Joe Mackay, Director of Human Resources Terra Penrose, Director of Information Systems John Salama, and Head of Legal Affairs Andrew Griffin. The Kraken Robotics operations division is led by Bernard Mills, with team members including Executive Vice President of Technology Simon Partridge (former President of Covelya Group), Executive Vice President of Products Dr. Graham Brown (former Managing Director of Covelya subsidiary Sonardyne International), Executive Vice President of Corporate Performance Gary Moynehan (former CFO of Covelya Group), and Executive Vice President of Strategy and Growth David Shea (former Executive Vice President of Products and CTO at Kraken). The position of Executive Vice President of Systems and Services is currently being recruited. COO Nat Spencer will depart at the end of July.
The cash portion of the purchase price was funded by the net proceeds from Kraken's $402.5 million CAD subscription receipt public offering completed in March 2026, interest, and drawings under a new credit facility. At closing, Kraken terminated its existing credit facility, established a $125 million CAD secured non-revolving term credit facility, and increased its existing $35 million CAD revolving credit facility to $60 million CAD, with the maturity date extended to March 2031. The new credit facility was fully drawn to partially fund the cash consideration. Upon completion of the acquisition, each subscription receipt holder automatically received one common share without additional payment. Trading of the subscription receipts was delisted from the TSX Venture Exchange (TSXV) at market close today, and the common shares issued thereby are expected to begin trading on the TSXV tomorrow. Sellers of Covelya Group will hold approximately 4% of the issued and outstanding common shares, which will be unlocked in three tranches at 12, 18, and 24 months after closing. Kraken plans to release second-quarter results at the end of August 2026, with third-quarter results to be released at the end of November and include Covelya's contribution. The company also plans to apply for listing of its common shares on the Toronto Stock Exchange (TSX), expected to be completed by the end of 2026 or early 2027.
