Kraken Robotics closes Covelya acquisition for $615 million
Kraken Robotics Inc. acquired Covelya Group Limited for $615 million, significantly raising its 2026 revenue guidance to $290–320 million and Adjusted EBITDA to $65–75 million. The company secured $125 million in new credit facilities and announced leadership changes, including Bernard Mills' promotion to President.
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Kraken Robotics Inc. has completed the acquisition of Covelya Group Limited for approximately $615 million, a move designed to establish the company as a global provider of mission-critical, dual-use subsea intelligence solutions. The transaction, which closed on July 2, 2026, was funded through approximately $480 million in cash and the issuance of 15,882,352 common shares at a deemed price of $8.50 per share. The company anticipates the acquisition will generate $10 million in cost synergies within 24 months and drive low-to-mid double-digit EPS accretion in 2027.
Updated 2026 Financial Guidance
Reflecting the inclusion of Covelya Group, Kraken Robotics has updated its 2026 financial outlook. The company now projects consolidated revenue to reach between $290,000,000 and $320,000,000, a significant increase from the prior guidance range of $165,000,000 to $175,000,000. Adjusted EBITDA is expected to range between $65,000,000 and $75,000,000, compared to the previous outlook of $40,000,000 to $50,000,000. Revenue for the year is expected to be weighted toward the second half.
| Metric | 2025 Actual | Prior 2026 Guidance Range | New 2026 Guidance Range |
|---|---|---|---|
| Consolidated Revenue | $102,210,000 | $165,000,000 – $175,000,000 | $290,000,000 – $320,000,000 |
| Adjusted EBITDA | $24,693,000 | $40,000,000 – $50,000,000 | $65,000,000 – $75,000,000 |
| Adjusted EBITDA Margin | 24% | 24% – 29% | 22% – 23% |
| Capital Expenditures/Intangible Assets | $30,294,000 | $15,000,000 – $18,000,000 | $27,000,000 – $33,000,000 |
Strategic Rationale and Orders
Since announcing the transaction, Kraken and Covelya have secured additional product orders of approximately $13 million and $17 million, respectively. This brings total announced orders for 2026 to approximately $110 million for Kraken and $182 million for Covelya Group. The strategic benefits of the acquisition include deeper customer relationships in the defence and maritime surveillance markets, an expanded product offering, and enhanced technical capabilities through an experienced engineering team.
Leadership and Organizational Changes
To support the integration, Kraken Robotics is implementing a new organizational structure comprising a Kraken Group focused on governance and a Kraken Robotics operating business focused on operational excellence. Bernard Mills has been promoted to President of Kraken, while the Corporate Group leadership will include Greg Reid as CEO, Joe Mackay as CFO, and Terra Penrose as Chief People Officer. Nat Spencer, Chief Operations Officer, will leave the company at the end of July 2026.
Financing and Listing Plans
The cash portion of the purchase price was funded by the net proceeds of a $402.5 million bought deal public offering of subscription receipts, interest earned on those proceeds, and borrowings under a new $125 million credit facility. The company also increased its existing revolving credit facility from $35 million to $60 million, extended to March 2031. Following the acquisition, Kraken intends to apply to list its common shares on the Toronto Stock Exchange by year-end 2026 or early 2027.
How will the increased leverage from the new credit facility impact Kraken's financial flexibility for future M&A or R&D investments?
What specific integration challenges does Kraken face in merging the organizational cultures and operational systems of the two entities?
Will the company pursue further strategic acquisitions to complement the Covelya Group portfolio, or focus on digesting this transaction?
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