Kraken Robotics announced that it has closed its previously announced acquisition of Covelya Group. The transaction was valued at approximately C$615 million, subject to closing adjustments.
Covelya Group adds complementary subsea technology capabilities to Kraken’s platform. Kraken said the acquisition positions the combined company as a global provider of mission-critical dual-use subsea intelligence solutions.
The acquisition aligns with Kraken’s strategy of delivering a broader portfolio of dual-use technologies. The company said the deal supports deeper customer relationships in the defense and maritime surveillance markets, expands its subsea technology product offering, and increases its total addressable market.
Kraken also said the acquisition adds strategic locations for geographic expansion and improves business diversification. The company expects Covelya to bolster technical capabilities through an experienced engineering team and advanced facilities.
Since reporting first-quarter 2026 results, Kraken and Covelya have secured additional product orders of approximately C$13 million and C$17 million, respectively. These awards bring announced 2026 orders to approximately C$110 million for Kraken and C$182 million for Covelya.
Kraken updated its 2026 financial guidance to reflect the July 2, 2026 closing date and the inclusion of Covelya. The company now expects consolidated revenue of C$290 million to C$320 million and adjusted EBITDA of C$65 million to C$75 million for 2026.
The acquisition is expected to be accretive across key financial metrics. Kraken said it expects low-to-mid double-digit EPS accretion in 2027 after including the full impact of expected cost synergies.
Kraken is targeting approximately C$10 million of cost synergies within 24 months. The company also said it continues to maintain a strong balance sheet with minimal net debt following the drawdown of its new credit facility.
As part of the integration, Kraken is implementing a new organizational structure. The structure will include Kraken Group, focused on financial and organizational governance, and a clearly defined Kraken Robotics operating business focused on operational excellence, strategic execution, and financial performance.
Bernard Mills has been promoted to President of Kraken. Mills previously served as Kraken’s EVP Defence and brings experience leading large organizations, including prior roles as CEO and Managing Director of Stelia North America and President of Ultra Sonar Systems.
The C$615 million purchase price was comprised of about C$480 million in cash and about C$135 million through the issuance of 15,882,352 Kraken common shares at a deemed issue price of C$8.50 per share. The cash portion was funded through Kraken’s C$402.5 million bought deal public offering of subscription receipts, interest earned on those proceeds, and borrowings under a new credit facility.
Kraken also amended its existing credit facility to create a new C$125 million committed secured non-revolving term credit facility. The company increased its revolving credit facility from C$35 million to C$60 million and extended the revolving facility to March 2031.
After giving effect to the acquisition and subscription receipt offering, the seller of Covelya Group owns approximately 4% of Kraken’s issued and outstanding common shares. Those shares are subject to a lock-up agreement with one-third released at 12, 18, and 24 months after closing.
Kraken plans to report second-quarter 2026 results in late August and third-quarter 2026 results, which will include Covelya’s contribution, in late November. With the acquisition complete, Kraken intends to apply to list its common shares on the Toronto Stock Exchange, with the process expected to be completed by year-end 2026 or early 2027, subject to approval.
KEY QUOTES:
“This acquisition positions Kraken as a global provider of mission-critical, dual-use subsea intelligence solutions. Since announcing the transaction, we have received positive feedback from customers who are looking forward to working with our combined engineering teams on integrated subsea technology solutions. We welcome the new employees to the team and look forward to the many benefits this combination can provide. Together, Kraken and Covelya Group bring complementary products, technological capabilities, and customer relationships that we expect will strengthen Kraken’s growth potential and long-term outlook. This positive long-term outlook is further supported by the expected increase in defence budgets globally, including growing investment in autonomous underwater systems.”
Greg Reid, CEO of Kraken Robotics
