Kraken Robotics Closes $615M Covelya Group Acquisition

Kraken Robotics has completed its acquisition of Covelya Group for approximately 615 million Canadian dollars, expanding its position in the fast-growing defence and maritime surveillance market. The deal combines Kraken's subsea robotics business with Covelya's engineering capabilities, and the company has raised its 2026 revenue guidance to a range of 290 to 320 million dollars to reflect the closing. Alongside the acquisition, Kraken has announced new product orders, a restructured leadership team and plans to move its share listing to the Toronto Stock Exchange by early 2027.

 

Strategic Rationale for the Deal

 

The acquisition is framed around strengthening Kraken's presence in defence and maritime surveillance. The company expects the deal to deepen customer relationships in this fast-growing market segment. It also broadens Kraken's product offering and expands its total addressable market in subsea technology. The transaction adds strategic locations that support geographic expansion and improve business diversification. Together these factors position the combined entity to pursue a wider range of opportunities.

The deal also brings significant technical and financial benefits to the enlarged group. Covelya contributes an experienced engineering team and advanced facilities that bolster Kraken's technical capabilities. The company anticipates financial accretion across key metrics as a result of the combination. This includes approximately 10 million dollars of cost synergies expected within 24 months of closing. Kraken also projects low-to-mid double-digit earnings per share accretion in 2027 once the full impact of those synergies is realised.

 

New Orders and Updated Guidance

 

Both companies have secured fresh product orders since Kraken reported its first-quarter results in May. Kraken added approximately 13 million dollars in new orders, while Covelya secured around 17 million dollars. These awards bring announced orders in 2026 to roughly 110 million dollars for Kraken and 182 million dollars for Covelya. Gross profit margins on the new orders are consistent with historical levels. This order flow provides a foundation for the company's revised financial outlook.

Kraken has updated its 2026 guidance to incorporate the acquisition and Covelya's contribution. Consolidated revenue is now expected to fall between 290 and 320 million dollars, up sharply from the prior range of 165 to 175 million dollars. Adjusted EBITDA guidance has risen to between 65 and 75 million dollars, compared with 40 to 50 million dollars previously. The company notes that 2026 revenue is expected to weight toward the second half of the year. Capital expenditure and intangible asset guidance has also increased to reflect the larger combined business.

 

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Leadership and Organisational Changes

 

The integration has prompted a restructuring of Kraken's organisation and leadership. The company is establishing a new structure comprising a Kraken Group focused on governance and a distinct Kraken Robotics operating business. The operating business will concentrate on operational excellence, strategic execution and financial performance. These changes are intended to combine the strengths of both organisations into a more scalable platform. The aim is to support long-term growth across the enlarged group.

Several senior appointments accompany the new structure. Bernard Mills has been promoted to President of Kraken, bringing experience from leadership roles at Stelia North America and Ultra Sonar Systems. Greg Reid continues as Chief Executive Officer, with Joe Mackay as Chief Financial Officer. The operating business leadership draws heavily on former Covelya executives, including Simon Partridge as EVP Technology and Graham Brown as EVP Products. Chief Operations Officer Nat Spencer will leave the company at the end of July to pursue a new opportunity.

 

Financing and Closing Details

 

The purchase price was funded through a combination of cash and equity. Of the approximately 615 million dollar total, around 480 million dollars was paid in cash and about 135 million dollars through the issuance of new shares. The cash portion drew on proceeds from a 402.5 million dollar bought deal offering of subscription receipts that closed in March 2026. It was supplemented by interest earned on those proceeds and borrowings under a new credit facility. The company drew down the 125 million dollar facility in full to cover part of the cash consideration.

The closing triggered several changes to Kraken's share structure and listing plans. Each subscription receipt holder is entitled to receive one common share automatically upon closing. The subscription receipts are being delisted from the TSX Venture Exchange, with the new common shares expected to begin trading the following day. The seller of Covelya now holds approximately 4 percent of Kraken's shares, subject to a staggered lock-up over 24 months. Kraken intends to apply to list on the Toronto Stock Exchange, expecting the process to complete by year-end 2026 or early 2027.