Kraken Robotics acquires Covelya Group for $615M

Kraken Robotics Inc. last week acquired Covelya Group Ltd. for around $432 million USD ($615 million CAD).  Kraken said this acquisition aligns with its goal to deliver value to customers through a portfolio of dual-use technologies.

“This acquisition positions Kraken as a global provider of mission-critical, dual-use subsea intelligence solutions,” said Greg Reid, CEO of Kraken Robotics. “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,” he added. “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 defense budgets globally, including growing investment in autonomous underwater systems.”

How will Covelya Group benefit Kraken?

Kraken Robotics said the acquisition will expand its product offerings and total addressable market in subsea technology. It will also help the company deepen its relationships with customers in the defense and maritime surveillance sectors. 

Covelya also opens up new strategic locations for geographic expansion and improves business diversification for Kraken. The company said deal also provides financial benefits across key metrics, including $7 million of cost synergies within 24 months.

Covelya Group is made up of:

• Sonardyne, which delivers end-to-end systems for maritime operations
• Wavefront Systems, which has developed Sentinel Intruder Detection Sonar (IDS), Vigilant Forward Looking Sonar (FLS), Solstice Multi Aperture Side-Scan Sonar (MAS), and Sentry Integrity Monitoring Sonar (IMS)
• Chelsea Technologies, which provides sensors and systems for customers across shipping, marine science, water quality, and defence sectors
• EIVA, which provides software, equipment, and integrated systems for maritime customers
• Voyis, which provides versatile optical systems for underwater environments
• Forcys, which delivers and integrates underwater technology systems for navies and military organizations

Kraken reorganizes

As part of its integration with Covelya Group and its subsidiary companies, Kraken is implementing a new organizational structure. The new structure will consist of Kraken Group, which will focus on financial and organizational governance. Kraken Robotics will operate as a clearly delineated business.

The company is establishing an integration plan with a dedicated team. It will begin integrating employees, systems, finance, sales, and operations to realize potential revenue and cost synergies.

Mount Pearl, Canada-based Kraken Robotics claimed that its products and services enable clients to safely, efficiently, and sustainably overcome challenges in our oceans. Last year, the company closed its previously announced underwritten public offering, bringing in over $115 million.

A few months earlier, Kraken acquired 3D at Depth Inc., a subsea services company specializing in high-resolution lidar imaging and measurements. 3D at Depth is now a wholly owned subsidiary of Kraken.

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