Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeInnovationNewsNewfoundland robotics firm eyes growth with U.K. acquisitionKraken Robotics Inc. has officially taken over U.K.-based Covelya Group Limited in a tech deal worth $615 million You can save this article by registering for free here. Or sign-in if you have an account.Kraken Robotics is a marine technology company specializing in sensors, subsea batteries and underwater robotic systems. Photo by Andrew Robinson /ContributedA Newfoundland and Labrador-based robotics company has finalized an acquisition that could almost quadruple its annual revenue to $600 million over the next two years.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorThe official consolidation of Kraken Robotics Inc. with Covelya Group Ltd. was announced July 2. The deal is worth $615 million.Kraken Robotics Inc. specializes in subsea sensing, powering and robotic systems that can tolerate complex marine conditions. The products have applications that appeal to commercial customers from around the world, as well as countries looking to enhance their national defence capabilities.Headquartered in the United Kingdom, the Covelya Group includes Sonardyne, EIVA, Forcys, Voyis and Chelsea Technologies — all companies involved in developing a variety of marine technologies.Breaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Posthaste will soon be in your inbox.We encountered an issue signing you up. Please try againTogether, the companies combine skilled global teams committed to solving complex underwater challenges through world-class, dual-use technologies.The purchase reinforces Kraken’s position as a global provider of subsea technology and intelligence solutions, said Greg Reid, chief executive director of Kraken Robotics.“It makes us a larger player in the underwater technology space,” Reid said in an interview with Postmedia on Friday, July 3.“When I say larger, (I mean a) much, much larger number of technical people and increased manufacturing capacity across other geographies.” Greg Reid is the chief operating officer of Kraken Robotics, a St. John’s-based company that develops technology for underwater research. Photo: SubmittedUntil now, most of Kraken’s manufacturing has been done in Canada and Germany. It will now also have a solid manufacturing base in the U.K.The merger broadens Kraken’s overall product portfolio. In addition to the Kraken sonar and battery systems used in underwater drones, the company will now also be able to add sophisticated navigation, communication and optical imaging systems that can go inside these sorts of vehicles.“It gives us more technical content or more dollars per underwater drone,” said Reid.In a release announcing the closure of the deal, Reid said Kraken has received positive feedback from customers looking forward to working with the combined engineering teams on integrated subsea technology solutions.“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,” he said in the statement. “This positive long-term outlook is further supported by the expected increase in defence budgets globally, including growing investment in autonomous underwater systems.” A Kraken Robotics Katfish subsea surveying system is seen at their booth in 2023 at the DEFSEC Atlantic (Canadian Defence Security and Aersospace Exhibition Atlantic). Kraken announced its acquisition of a U.K.-based company that could almost quadruple its revenue over the next few years. Photo by Tim Krochak /noSince reporting its Q1 2026 results on May 28, 2026, Kraken and Covelya have secured additional product orders of around $13 million and $17 million, respectively.These bring announced orders in 2026 to about $110 million for Kraken and $182 million for Covelya Group. Gross profit margins associated with these orders are consistent with historical gross profit margins, according to the company.Kraken updated its guidance for 2026, noting that its previous expectation of between $165 million to $175 million in consolidated revenue for 2026 has been updated to be between $290 million and $320 million with the acquisition of Covelya Group.As Reid explained, those numbers combine 12 months of Kraken revenue with just six months of revenues generated by Covelya.“Including a full year of Covelya in 2027, a full year of Kraken, plus the growth that we’re seeing, the estimates are in the $550 to $600 million revenue range for next year in 2027,” Reid told Postmedia.There will also be around $10 million worth of cost synergies within 24 months, according to the company’s release.The Covelya Group employs around 750 people, who will join the nearly 500 people working for Kraken for a joint workforce approaching 1,300 people.Nearly 30 per cent of those will be based in Canada, while nearly 40 per cent will be working out of the U.K. There are around 100 employees in each of Germany and the United States, plus some sales, service and support offices in Australia, Singapore and Brazil.Having a strong presence across the Five Eyes — the intelligence-sharing alliance composed of the United States, the United Kingdom, Canada, Australia, and New Zealand — bodes well for making further inroads in both the strategic defence sector and commercial industries, noted Reid.He said that Covelya Group has made strong inroads with sensors that might not be aboard an underwater vehicle, but rather on the ocean floor to monitor things such as oil and gas reservoirs, offshore carbon capture and storage solutions, or defence applications, such as monitoring submarine traffic.Other systems now in the Kraken portfolio might be used on surface vessels, added Reid.“It really expands our total addressable market for all of our technology,” he said.The complementary technology will undoubtedly eventually lead to even more products being added to the suite already available through the joining of Kraken and the Covelya Group.For example, Kraken’s KATFISH — an unmanned underwater device that carries sonar technology and can collect data over a large area — has been garnering lots of attention for its mine countermeasure applications. Kraken Robotics’ KATFISH towed synthetic aperture sonar tentacles provide radar data while being towed behind vessels. The new acquisition of Covelya, which has a similar, smaller device that uses a more traditional sensor, could open up more solutions to customers. Photo by Dylan DesRoches /Kraken RoboticsIn one of the few areas in which Kraken and Covelya were competitors, the ViperFish produced by EIVA — one of the acquired subsidiaries — is a similar device that is a bit smaller and carries a more traditional sensor.“There are some areas where the engineering team and product teams will get together and figure out what’s the best solution for the customers in different markets, so you might see some evolution on that front,” said Reid.With the Canadian government making more of a concerted push towards strengthening national defence capabilities, Reid feels Kraken and the assets that have now come with the acquisition of the Covelya Group will be part of those plans at some point.“We’re hopeful that we’ve got the right solution for what the Canadian government will need and you’ll see Kraken technology deployed in the Arctic in the future as well,” he said. “We’ve got a lot of different technical solutions that are the right solutions for what the government needs for maritime surveillance and Arctic security.” Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. 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