Kraken Robotics Announces Signing of Strategic Acquisition to Expand Global Maritime Capabilities
Press Release
$615 Million Acquisition of the Covelya Group Will Be Partially Financed Through a $350 Million Public Offering of Subscription Receipts
ST. JOHN’S, Newfoundland, March 03, 2026 (GLOBE NEWSWIRE) -- Kraken Robotics Inc. (“Kraken” or the “Company”) (TSX-V: PNG), is pleased to announce that it has entered into an agreement to acquire Covelya Group Limited (“Covelya Group”), a leading international provider of mission-critical underwater technology solutions operating through its subsidiary companies: Sonardyne International Ltd., EIVA A/S, Forcys Ltd., Wavefront Systems Ltd., Voyis Imaging Inc., and Chelsea Technologies Ltd.
The Company will acquire Covelya Group for total consideration of $615 million, excluding transaction costs and subject to adjustment, of which $480 million will be paid in cash and $135 million will be satisfied through the issue of common shares of the Company (“Common Shares”, and such Common Shares the “Consideration Shares”) to the seller pursuant to a share purchase agreement dated March 3, 2026 (the “Share Purchase Agreement”), between Kraken, its subsidiary Kraken Robotic Systems Inc. and Sonardyne Holdings Limited (the “Acquisition”).
ACQUISITION RATIONALE
Positions Kraken as a major supplier of dual-use subsea technology.
Combined revenue(1) of $365 million in 2025 with a Combined Adjusted EBITDA margin(2) of 24%.
Acquiring a high growth (24% revenue CAGR(3) since 2023), profitable company with attractive margins.
Allows for deeper customer relationships in the fast-growing defence and maritime surveillance market.
Expands product offering and Kraken’s total addressable market in subsea technology.
Adds strategic locations for geographic expansion and improves business diversification.
Bolsters technical capabilities with an experienced engineering team and highly advanced facilities.
Accretive across key financial metrics with opportunity for revenue and cost synergies.
Maintains balance sheet strength with flexibility to fund future growth.
Capitalizes on supportive trends in both defence and non-defence sectors, including energy.
COVELYA GROUP BACKGROUND
Covelya Group designs, manufactures, sells and supports high-performance underwater technology for maritime defence and commercial customers globally. Through its subsidiary companies, Covelya Group provides a sophisticated suite of technology and software centered around providing reliable navigation, communication, positioning, imaging, measuring, and monitoring for maritime uncrewed systems, as well as some crewed surface vessels.
In addition to being a sub-systems provider, Covelya Group also offers stand-alone capabilities, notably deployed sensors and remotely operated towed vehicles (ROTVs). They are a large, highly profitable, high-growth organization that is expected to report revenue in 2025 of between $249 million and $275 million. Covelya Group is headquartered in the United Kingdom with nearly 750 employees, operating 12 facilities across North America, South America, Europe and Asia Pacific.
With a track record of more than 50 years in underwater technology, Covelya Group has a strong history of innovation, quality manufacturing, and customer service in addition to extensive, trusted relationships across a diversified client base.
MANAGEMENT COMMENTS
“We have long admired Covelya Group and its operating businesses and are very pleased to join forces with its talented team,” said Greg Reid, President and CEO of Kraken. “Strategically, this acquisition will provide a unique opportunity to combine two leading subsea technology providers with complementary products, operating in markets with barriers to entry and high growth potential. Additionally, some key customers of Covelya Group are also existing customers of Kraken, providing significant opportunities to create value by cross selling within our overall client base.”
“The combined company will be able to provide more integrated solutions of mission-critical systems for underwater platforms and subsea sensors/monitoring systems,” said Reid. “These key technology systems include Kraken’s subsea batteries and synthetic aperture sonar and Covelya Group’s subsea navigation, positioning, and communications offering. In supplying multiple products and services, Kraken will become a more attractive partner to naval system integrators at a time when industry demand is growing rapidly. This accretive acquisition also enhances our technical capabilities, expands our total addressable market, and improves overall business diversification. We look forward to this combination and the potential to create value for shareholders, customers, employees, and other stakeholders.”
Simon Partridge, Executive Chairman of Covelya, said “We have mutually admired Kraken’s technology alongside its management team and believe this transaction is extremely beneficial to both companies. For Covelya Group, we will be able to leverage Kraken’s experience in the rapidly growing defence and maritime surveillance market while also enhancing our product and service-based offerings. The combined company will have a broad product portfolio and a stable customer base, with in-house technological capabilities required to enable the rapid growth expected for underwater vehicles. As part of a larger and well-capitalized enterprise, we will have a greater ability to re-invest in developing new technologies in addition to addressing the larger, more complex needs of our customers. We are extremely excited about today’s announcement and the opportunity to accelerate the new company’s growth trajectory moving forward.”
STRATEGIC RATIONALE
Creates a Major Supplier for Dual-Use Subsea Technology: This strategic combination advances Kraken’s strategy to deliver market-leading value to customers globally by providing the Company with industry leading subsea technology, increased size and scale, long-standing customer relationships, experienced technical teams and a greater capability to provide integrated solutions. With highly advanced facilities, alongside global manufacturing and sales capabilities, the Company will be well-positioned to continue to drive innovation.
Deeper Customer Relationships in the Fast-Growing Defence and Maritime Surveillance Market: Autonomous platforms within the defence industry currently include ROTVs, remotely operated vehicles (ROVs), autonomous underwater vehicles (AUVs), uncrewed surface vessels (USVs) and stationary sensors, all of which depend on power, navigation, communication, positioning, and imaging sensors. As a result of the Acquisition, Kraken will now be able to provide a more comprehensive and robust technology offering, including each of these mission-critical solutions, across a wider range of platforms. These complementary products, which are currently embedded within a broad group of key defence customers, will allow Kraken to become a more attractive partner to naval system integrators while also earning a greater share of the overall content sold per platform. This combination is timely as defence budgets are increasing globally, and the adoption of autonomous systems as force multipliers in naval military applications continues to accelerate. The increasing trend towards distributed and networked systems is also expected to increase demand for positioning, navigation, and communication solutions.
Expands Product Offering and Kraken’s Total Addressable Market within Subsea Technology: Covelya Group’s technologies provide Kraken greater exposure to new segments of the subsea technology market and enhanced opportunities for revenue growth in both products and services. Kraken will now be able to provide solutions for various autonomous underwater platforms and crewed vessels. Such incremental technology solutions for Kraken includes those that provide navigation, dynamic positioning, underwater communications, subsea data collection, intruder detection sonar, subsea integrity and production monitoring, forward-looking sonars, subsea infrastructure installation, and geohazard monitoring. Covelya Group also provides Kraken with software and integrated system solutions that enable remote and onsite operations and enhanced data collection with features for automation, autonomy and artificial intelligence, built upon over 50 years of demonstrated experience in subsea operations. In addition to the growing demand within the defence industry, the Company’s combined solutions have numerous applications in various commercial end markets.
Adds Strategic Locations for Geographic Expansion and Improves Business Diversification: Kraken will become a more diversified business in terms of its end markets, product offering, customer base and geographic exposure, by way of this Acquisition. With more than 700 customers on a combined basis, Covelya Group is expected to provide Kraken with additional momentum and growth opportunities with defence customers while also bolstering the Company’s presence and cash flow stream within the commercial market. This broader customer base is also beneficial for feedback to accelerate new product development cycles. Geographically, Kraken and Covelya Group can leverage their respective strengths across different regions, allowing for stronger sales and marketing capabilities for future growth.
Bolsters Technical Capabilities with an Experienced Engineering Team and Access to Highly Advanced Facilities: Both Kraken and Covelya Group share a common culture centered around innovation and technical excellence as evidenced by a combined portfolio of over 110 patents (issued and pending). Over its history, Covelya Group has invested heavily in manufacturing, assembly, calibration, and testing facilities. This Acquisition provides Kraken with important in-house technological capabilities, access to additional research and development for new product development, and a team of engineers with a lengthy track record around innovation. Kraken expects to leverage this expertise across the organization. At closing, the Company will have over 450,000 square feet of production capacity located in key markets globally, and approximately 1,200 employees, including 790 technical staff, comprised of engineers, scientists and technical sales.
ACCRETION AND FINANCIAL METRICS
The Acquisition is immediately accretive and is expected to generate low-to-mid double-digit EPS accretion in 2027, after including the full impact of expected cost synergies. The Acquisition is also expected to be accretive across other key financial metrics including revenue, EBITDA and cash flow per share.
Covelya Group is expected to generate revenue in 2025 of between $249 million to $275 million and Covelya Adjusted EBITDA(4) of between $60 million to $67 million in 2025, representing a CAGR(5) of 24% and 41% respectively since 2023. On a combined basis, Kraken and Covelya Group’s estimated revenue for 2025 is expected to be between $351 million to $379 million with a Combined Adjusted EBITDA Margin of 24%. These estimated results are based on preliminary unaudited financial statements and are subject to adjustment.
The Company is targeting approximately $10 million of cost synergies within the first 24 months through expected efficiencies in a shared supply chain, facilities, optimization of research and development efforts, integration of technology systems, and administrative optimization. Additional revenue synergies, such as cross-selling opportunities, have not been included in the expected accretion or synergy assumptions.
At closing, Kraken will maintain a strong balance sheet and financial flexibility to fund future growth opportunities with a Combined Net Leverage(6) ratio of approximately 0.8 times. The Company expects this ratio to improve over the near-to-medium term through a combination of growth and debt repayments.
CERTAIN PRELIMINARY 2025 YEAR-END RESULTS AND 2026 GUIDANCE
On a preliminary and unaudited basis, Kraken’s financial results for fiscal 2025 are expected to show consolidated revenue in the range of $102 million to $104 million and Adjusted EBITDA of $24 million to $26 million. These annual results, which are the highest in the Company’s history, were driven by record results in Kraken’s SeaPower batteries and Synthetic Aperture Sonar products, as well as strong results in the subsea services division. This growth, however, was partially offset by the decline in sonar-related revenue in the current year due to the timing of KATFISH projects and the acquisition component of the Canadian Navy RMDS system integration project nearing completion.
For 2026, Kraken expects revenue to be between $165 million and $175 million and Adjusted EBITDA to be between $40 million to $50 million, excluding any contribution from the Acquisition. The Company’s outlook for 2026 is driven by existing purchase orders for SeaPower batteries, expected purchase orders for sonar products, and continued growth in the commercial services business, including a full year contribution from 3D at Depth Inc. which was acquired in 2025. Consistent with prior years, revenue in 2026 is expected to be weighted toward the second half of the year.
The Company plans to release updated 2026 guidance for the combined company upon closing of the Acquisition, which is expected to occur in the second quarter of 2026. Closing of the Acquisition is conditional upon the satisfaction of customary conditions such as the approval of the TSX Venture Exchange (the “TSXV”), and regulatory approvals.
MANAGEMENT STRUCTURE
Kraken will continue to be led by the current management team, including the recent additions of Bernard Mills as EVP Defence and Terra Penrose as Chief People Officer, alongside key members of the Covelya Group management team. Moving forward, Kraken will have two market-facing business units being Defence and Commercial.
The Company will continue to be headquartered in Canada, with operations across Australia, Brazil, Canada, Denmark, Germany, Singapore, the U.K. and the U.S.
ACQUISITION FINANCING AND DETAILS
Under the Share Purchase Agreement, the Company will acquire all of the issued and outstanding shares of Covelya Group through its subsidiary Kraken Robotic Systems Inc. for total consideration of $615 million, excluding transaction costs and subject to customary purchase price adjustments, of which $480 million will be paid in cash, and $135 million will be satisfied through the issue of Common Shares to the seller.
The Company intends to fund the cash portion of the Acquisition and related expenses through a committed, secured, non-revolving term credit facility in the amount of $150 million (the “New Credit Facility”), and the net proceeds of a bought deal public offering of subscription receipts (“Subscription Receipts”) for gross proceeds of approximately $350 million (the “Offering”), as further detailed below.
The New Credit Facility will have a five-year term, and will be provided under an amendment to the Company’s existing credit facilities. The drawdown of the New Credit Facility is subject to certain customary conditions for secured acquisition financings of this nature. The Company’s current $35 million revolving credit facility, previously set to expire in April 2027, will also be amended with a five-year term from the date of the New Credit Facility.
The Company anticipates that the completion of the Acquisition will occur in the second quarter of 2026. Completion of the Acquisition is subject to certain conditions, including, among other things, receipt of all required regulatory approvals, including the approval of the TSXV, receipt of applicable approvals or non-objections under foreign direct investment and merger control regulations, other consents and regulatory approvals and other customary closing conditions for a transaction of this nature. The Transaction has been approved by the Board of Directors of the Company, and has received all required approvals from the seller and its shareholders.
The seller is expected to own approximately 4% of the issued and outstanding Common Shares on a pro-forma basis after completion of the Acquisition and the exchange of the Subscription Receipts issued pursuant to the Offering, assuming no exercise of the Over-Allotment Option (as defined below). The Consideration Shares will be subject to a lock-up agreement with one-third released at 12, 18, and 24 months from the completion date of the Acquisition. The seller will not participate in the Offering. The Acquisition is arm’s length and no finder’s fees will be paid.
PUBLIC OFFERING OF SUBSCRIPTION RECEIPTS
In connection with the Acquisition, Kraken has entered into an agreement with a syndicate of underwriters led by Scotiabank and Desjardins Capital Markets (collectively, the “Lead Underwriters”, and collectively the “Underwriters”), under which the Underwriters have agreed to purchase, on a bought deal basis 41,177,000 Subscription Receipts at a price of $8.50 per Subscription Receipt (the “Offering Price”) for aggregate gross proceeds of approximately $350 million (the "Offering"). The Company intends to use the net proceeds of the Offering to partially fund the cash purchase price of the Acquisition, as further described below.
The Company has also granted the Underwriters an over-allotment option (the “Over-Allotment Option”), exercisable in whole or in part, for a period of 30 days following the date of the closing of the Offering, to purchase up to an additional number of Subscription Receipts (or in certain conditions, Common Shares) equal to 15% of the number of Subscription Receipts sold pursuant to the Offering, at the Offering Price and on the same terms and conditions as the Offering, to cover over-allotments, if any.
Each Subscription Receipt will entitle the holder thereof, without payment of any additional consideration or further action on the part of the holder, to receive one Common Share upon the satisfaction or waiver of certain release conditions (including the satisfaction of all conditions precedent to the completion of the Acquisition, other than the payment of the purchase price and the satisfaction conditions precedent that by their nature are to be satisfied at completion), subject to adjustment in accordance with the terms of a subscription receipt agreement to be entered into upon closing of the Offering (the "Subscription Receipt Agreement").
The gross proceeds from the Offering (including from any exercise of the Over-Allotment Option prior to the completion of the Acquisition) less 50% of the Underwriting Commission (as defined below) and the Underwriters’ expenses will be held in escrow pending the satisfaction or waiver of the release conditions. If the Acquisition is completed on or prior to 5:00 p.m. (Toronto time) on December 31, 2026 (the “Deadline”), the escrowed funds will be released to the Company and each Subscription Receipt will be exchanged for Common Shares. If the Acquisition is not completed prior to the Deadline, the holders of Subscriptions Receipts will receive a cash payment equal to the Offering Price of the Subscription Receipts plus their pro rata share of any interest actually earned on the escrowed funds during the term of the escrow, less applicable withholding taxes. The Company will pay the Underwriters a cash commission equal to 4.0% of the gross proceeds of the Offering (the “Underwriting Commission”), of which 50% will be paid upon closing of the Offering and 50% will be paid on upon the closing of the Acquisition.
Closing of the Offering is expected to occur on or about March 12, 2026. The Offering is subject to customary regulatory approvals, including approval of the TSXV.
The Subscription Receipts will be offered in all provinces and territories of Canada pursuant to a prospectus supplement (the “Prospectus Supplement”) to the short form base shelf prospectus of the Company dated August 7, 2025 (the “Base Shelf Prospectus”), and other jurisdictions outside of Canada as may be agreed between the Company and the Underwriters. Access to the Prospectus Supplement, the corresponding Base Shelf Prospectus and any amendment to such documents is provided in accordance with securities legislation relating to procedures for providing access to a shelf prospectus supplement, a base shelf prospectus and any amendment.
The Base Shelf Prospectus is accessible, and the Prospectus Supplement will be accessible within two business days from the date hereof, through SEDAR+ at www.sedarplus.ca. An electronic or paper copy of the shelf prospectus supplement, the base shelf prospectus and any amendment to the documents may be obtained, without charge, from: Scotiabank by mail at 40 Temperance Street, 6th Floor, Toronto, Ontario M5H 0B4, attn: Equity Capital Markets, by email at equityprospectus@scotiabank.com or by telephone at (416) 863-7704. Additionally, copies of these documents may be obtained upon request in Canada from Desjardins Capital Markets at 25 York St., 10th Floor, Toronto, ON M5J 2V5, Attention: Equity Capital Markets or by email at ecm@desjardins.com by providing Desjardins with an email address or address, as applicable. The Base Shelf Prospectus and Prospectus Supplement contain important, detailed information about the Company and the proposed Offering. Prospective investors should read the Base Shelf Prospectus and Prospectus Supplement (when filed) before making an investment decision.
The securities being offered pursuant to the Offering have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or the securities laws of any state of the United States, and may not be offered, sold or delivered, directly or indirectly, in the United States, unless exemptions from the registration requirements of the U.S. Securities Act and any applicable U.S. state securities laws are available. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction, nor shall there be any sale of the securities in any jurisdiction, in which such offer, solicitation or sale would be unlawful. "United States" and "U.S. person" are as defined in Regulation S under the U.S. Securities Act.
ADVISORS
Scotiabank is acting as exclusive financial advisor to Kraken and has provided a fairness opinion to the Kraken Board of Directors that, as of the date of such opinion, and based upon the assumptions, limitations and qualifications set forth therein, the consideration payable pursuant to the Share Purchase Agreement is fair, from a financial point of view, to Kraken.
Scotiabank and Desjardins Capital Markets are acting as Lead Bookrunners for the Company’s public offering of Subscription Receipts. The Bank of Nova Scotia is acting as administrative agent for the New Credit Facility.
Gowling WLG is acting as legal advisor to Kraken. Goodmans LLP is acting as legal advisor to the Underwriters.
Piper Sandler is acting as exclusive financial advisor to Covelya Group. Osborne Clarke is acting as legal advisor to Covelya Group.
CONFERENCE CALL DETAILS
Kraken management will host a conference call today, March 3, 2026, starting at 4:30 p.m. ET to discuss the announced Acquisition. Participants can listen to this event at the webcast details below, or by dialing 1-833-752-3301 (North America) or 1-647-846-2734 (International) for operator assistance. A recording will also be made available following the call. This call will not include a question and answer session.
Webcast Details: https://event.choruscall.com/mediaframe/webcast.html?webcastid=6ve0PCLE
Shareholders and investors can find a presentation on Kraken’s website, further highlighting details of the Acquisition.
ABOUT KRAKEN ROBOTICS INC.
Kraken Robotics (TSX.V:PNG) is transforming subsea intelligence through 3D imaging sensors, power solutions, and robotic systems. Our products and services enable clients to overcome the challenges in our oceans – safely, efficiently, and sustainably.
Kraken’s synthetic aperture sonar, sub-bottom imaging, and LiDAR systems offer best-in-class resolution, providing critical insights into ocean safety, infrastructure, and geology. Our pressure tolerant batteries deliver high energy density power for UUVs and subsea energy storage.
Kraken is headquartered in Canada with offices in North America, South America, and Europe, supporting clients in more than 30 countries worldwide.
ABOUT COVELYA GROUP
Covelya Group is an international provider of underwater technology solutions and has been supporting exploration of the world’s oceans and waters for over 50 years. Focused on innovation and technological development, Covelya Group offers market leading solutions for its customers’ challenges.
Will be interesting to see how the stock price moves tomorrow