$615 Million Acquisition of the Covelya Group Will Be Partially Financed Through a $350 Million Public Offering of Subscription Receipts
Preliminary 2025 Year-End Results and Stand-Alone 2026 Guidance Provided for Kraken Robotics
THIS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
THE BASE SHELF PROSPECTUS IS ACCESSIBLE, AND THE SHELF PROSPECTUS SUPPLEMENT FOR THE PUBLIC OFFERING AND ANY AMENDMENT TO THE DOCUMENTS WILL BE ACCESSIBLE, WITHIN TWO BUSINESS DAYS, THROUGH SEDAR+
(All dollar amounts are expressed in Canadian dollars, unless otherwise noted.)
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 [email protected] 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 [email protected] 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.
Figure 1: Kraken Robotics announces strategic acquisition to expand global maritime capabilities.
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.
NOTES TO PRESS RELEASE
(1) Combined revenue for 2025 represents the midpoint of the sum of the preliminary unaudited management estimated range for 2025 for each of Company and Covelya Group, assuming an exchange rate of £1.00 = $1.842. See “Combined Financial Information” below.
(2) Combined Adjusted EBITDA margin is a non-IFRS ratio based on the sum of preliminary unaudited management estimates of Adjusted EBITDA and Covelya Adjusted EBITDA for 2025, which are non-IFRS financial measures. See “Non-IFRS Measures” and “Combined Financial Information” below.
(3) Revenue CAGR refers to compound annual growth rate, and is based on the midpoint of management estimated range for revenue for 2025 for Covelya Group, compared with Covelya Group’s revenue for 2023.
(4) Covelya Adjusted EBITDA for 2025 is a forward-looking non-IFRS financial measure. See “Non-IFRS Measures” below.
(5) Adjusted EBITDA CAGR refers to compound annual growth rate, and is based on the midpoint of management estimated ranges for revenue and Covelya Adjusted EBITDA for 2025, compared with revenue and Covelya Adjusted EBITDA for 2023.
(6) Combined Net Leverage is a non-IFRS ratio based on Kraken Net Debt as at September 30, 2025, which is a non-IFRS financial measure. See “Non-IFRS Measures” below.
CAUTIONARY NOTES
Caution Regarding Preliminary and Unaudited Financial Results
This news release contains certain preliminary unaudited financial results of the Company and Covelya Group for the financial year ended December 31, 2025. This information is based on financial information prepared by the management of the Company and Covelya Group, respectively, but which are preliminary, unaudited, and not yet complete. Accordingly, these preliminary estimated financial results are based upon the Company’s and Covelya Group’s estimates and currently available information, which is subject to revision as a result of, among other things, the completion of the applicable company’s financial closing procedures, the audit of the applicable company’s financial statements for such period, and the completion of other operational procedures. Neither company’s auditor has audited, reviewed, examined, compiled or applied agreed-upon procedures with respect to such company’s preliminary unaudited financial information and, accordingly, neither of them expresses an opinion or any other form of assurance with respect thereto.
Although the Company believes the expectations reflected in this news release are based upon reasonable assumptions, the Company can give no assurance that actual results will not differ materially from these expectations. The Company’s audited consolidated annual financial statements for the year ended December 31, 2025, will be filed on its profile on SEDAR+ at www.sedarplus.ca, and may be materially different from the preliminary and unaudited financial information summarized in this news release as a result of the completion of normal quarter and year-end accounting close process, among other things.
Readers should exercise caution in relying on this preliminary unaudited financial information and should draw no inferences from this information regarding financial or operating data not provided.
Combined Financial Information
As a supplemental information for investors, this news release contains unaudited combined financial information of the Company and Covelya Group for the financial years ended December 31, 2024 and 2023, which has been prepared by management of the Company based on the audited consolidated annual financial statements of Covelya Group for the year ended December 31, 2024 and 2023, and the audited consolidated financial statements of the Company for the years ended December 31, 2024 and 2023, which are prepared in accordance with IFRS and are included or incorporated by reference in the Prospectus Supplement.
This news release also contains combined preliminary unaudited financial results of the Company and Covelya Group for the financial year ended December 31, 2025, which is based on financial statements that have been prepared by the management of the Company and Covelya Group, respectively, but which are preliminary, unaudited, and not yet complete. See “Caution Regarding Preliminary and Unaudited Financial Results” above.
Such information (the “Combined Financial Information”) information has been prepared by management of the Company by aggregating the historical operating results of the Company and Covelya Group, or in the case of 2025E information, management estimates of such operating results. Combined Financial Information is provided for illustrative purposes only. It is not intended to be, and has not been prepared as, combined financial information, has not been prepared in accordance with IFRS, and does not reflect adjustments such as purchase price allocation, fair value adjustments, transaction costs, financing effects, or other accounting impacts that would arise in accordance with the acquisition method of accounting under IFRS 3, Business Combinations.
The Combined Financial Information are not intended to be indicative of the results that would actually have occurred, or the results expected in future periods, had the events reflected therein occurred on the dates indicated. Any potential synergies that may be realized after completing the Acquisition have been excluded from the Combined Financial Information. There are limitations inherent in the very nature of combined data. Undue reliance should not be placed on the Combined Financial Information. Such financial information may not reflect what the Company’s consolidated financial position, results of operations or cash flows would have been if the Company had completed the Acquisition and related transactions during the historical periods presented, or what the Company’s financial position, results of operations or cash flows will be in the future.
Additional Underlying Assumptions
The Company cautions that the assumptions used to prepare estimated 2025 Revenue, 2025 Adjusted EBITDA, and accretion could prove to be incorrect or inaccurate. Accordingly, the actual results could differ materially from the Company’s expectations as set out in this news release. The Company considered numerous economic and market assumptions regarding the foreign exchange rate, competition, political environment, and economic performance of each region where the Company and Covelya Group operate.
Forward-Looking Statements
Certain statements contained in this news release constitute “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of applicable Canadian securities laws. Forward-looking statements include statements concerning the Offering, the Acquisition, the New Credit Facility, the Company’s current expectations, estimates, projections, assumptions and beliefs, and, in certain cases, can be identified by the use of forward-looking terminology such as “seeks”, “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes”, or variations of such words and phrases or statements that certain actions, conditions, events or results “may”, “could”, “should”, “would”, “might”, or “will be taken”, “occur” or “be achieved”, or the negative forms of any of these words and other similar expressions.
Forward-looking statements include estimates, plans, expectations, opinions, forecasts, projections, targets, guidance, or other statements that are not statements of fact. Such forward-looking statements are made as of the date of this news release. Forward-looking statements in this news release include, but are not limited to, statements with respect to: the timing and completion of the Offering and the Acquisition; the anticipated timing and closing of the New Credit Facility; the anticipated drawdown on the New Credit Facility; the satisfaction of all closing conditions in connection with the Offering and Acquisition, including the receipt of all applicable regulatory and governmental approvals, including TSXV and foreign direct investment approvals; the attractiveness and anticipated benefits of the Acquisition, including the impact of the Acquisition on the Company’s operations, financial condition, cash flows and overall strategy; the Company’s ability to retain and attract new business, achieve synergies and maintain market position arising from successful integration plans relating to the Acquisition; the Company’s ability to integrate Covelya Group within anticipated time periods and at expected cost levels; forward-looking financial and operating information for fiscal 2025 and upon closing of the Acquisition; expectations regarding anticipated cost savings and synergies; the strength, complementarity and compatibility of Covelya Group’s business with the Company’s existing business and teams; the integration of the Covelya Group business, and the cost and timing of such integration; and the key attributes of the Company’s business strategy and competitive strengths; expectations regarding revenue, expenses and operations, including revenue and Adjusted EBITDA guidance for fiscal 2026; the completion of existing purchase orders, and receipt of expected purchase orders; the performance of the Company’s business and operations; growth of the business, operations and potential activities of the Company; research and development programs; the acceptance by customers and the marketplace of new products and solutions; the ability to attract new customers and develop and maintain existing customers; the ability to successfully leverage current and future strategic partnerships and alliances; the Company’s ability to attract and retain personnel in connection with the Acquisition; the Company’s competitive position, business strategies, and its expectations regarding competition and its future success in competitive bidding processes; the anticipated trends and challenges in the Company’s business and the markets and jurisdictions in which the Company operates and expects to operate.
Forward-looking statements reflect the Company’s current expectations and assumptions, and are subject to a number of known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different from any anticipated future results, performance or achievements expressed or implied by the forward-looking statements. Should one or more of these risks and uncertainties materialize, or should underlying factors or assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Accordingly, readers are cautioned not to place undue reliance on the forward-looking statements or the assumptions on which the Company’s forward-looking statements are based.
In making the forward-looking statements included in this news release, the Company has made various material assumptions, including, but not limited to: continued compliance with regulatory requirements; the Company will have sufficient working capital and be able to secure additional funding necessary for continued growth and development; demand for the Company’s products and services and supply opportunities; the Company’s eligibility to participate in known and expected competitive bidding processes, and the Company’s likelihood of being selected as the successful proponent; revenue to be earned from new and existing contracts and expected renewals; the Company’s ability to maintain current and projected revenue if it fails to successfully compete for new contracts; the continued employment of key personnel, and that the Company will be able to obtain and retain additional qualified personnel, as needed, in a timely and cost-efficient manner; foreign exchange rates; the continuance of current tax, environmental and other laws; the continuance of relevant supply chains; the satisfaction of all conditions to closing the Offering, the New Credit Facility and the Acquisition and, in each case, on the timeframes contemplated; receipt of required regulatory and government approvals and lender consents, where applicable; the synergies in respect of the Acquisition will be realized based on the currently contemplated timing, and the operating performance post-Acquisition will be in line with current performance; the successful completion of the Acquisition and Kraken’s ability to obtain the anticipated benefits therefrom; the accuracy of historical and forward-looking operational and financial information and estimates provided by Covelya Group and the seller; the accuracy of financial and operational projections of Kraken; inflation rates in the jurisdictions where the Company conducts its business; and tariffs and other controls on imports and exports, tax, immigration or other policies that may impact relations with foreign countries or result in retaliatory policies. Although the Company believes that the assumptions on which the forward-looking statements are made are reasonable, based on the information available to the Company on the date such statements were made, no assurances can be given as to whether these assumptions will prove to be correct.
Risks, uncertainties and other factors that may cause actual results, events, levels of activity and achievements to differ materially from those anticipated in the forward-looking statements include, but are not limited to: failure to complete the Acquisition in all material respects in accordance with the Share Purchase Agreement; failure to obtain, in a timely manner, regulatory, stock exchange and other required approvals or satisfy other conditions in connection with the Offering and the Acquisition; failure to close the Offering or the New Credit Facility on the terms expected, or at all; the fact that the price at which the Subscription Receipts under the Offering are sold by the Underwriters may be less than the Offering Price; failure to realize the anticipated benefits of the Acquisition; the materiality of the closing adjustments to the purchase price for Covelya Group; unforeseen difficulties in integrating the business acquired pursuant to the Acquisition into Kraken’s operations; the inaccuracy of information provided by the Covelya Group and Seller in respect of the Acquisition; the inaccuracy of financial and operational projections; the inaccuracy of combined and pro forma information with respect to Kraken’s business, financial condition, cash flows and operations after giving effect to the Acquisition and/or the Offering; increased indebtedness; anticipated borrowings under the New Credit Facility; potential undisclosed costs or liabilities associated with the Acquisition; increased exposure to risks relating to foreign exchange rates; the collection of accounts receivable; increased competition; changes in market demand; and other risks inherent in the businesses conducted by the Company and Covelya Group. For a discussion of these and other factors that could cause the Company’s actual results, performance and achievements to be materially different from any anticipated future results, performance or achievements expressed or implied by the forward-looking statements, purchasers are also advised to carefully review and consider the risk factors identified in this news release, and the sections entitled “Risk Factors” in the Company’s annual information form for the year ended December 31, 2024, and its management’s discussion and analysis for the year ended December 31, 2024, and for the three- and nine-month periods ended September 30, 2025, as may be supplemented from time to time in documents filed by the Company from time to time with the securities regulatory authorities in Canada or other documents that the Company makes public, which are available on SEDAR+ at www.sedarplus.ca.
To the extent any forward-looking statements in this news release constitute future-oriented financial information or financial outlook within the meaning of applicable securities laws, such information is being provided to demonstrate the potential of the Company and readers are cautioned that this information may not be appropriate for any other purpose. Future-oriented financial information and financial outlook, as with forward-looking information generally, are based on current assumptions and are subject to risks, uncertainties and other factors. Ernst & Young LLP, the Company’s independent auditors, has not audited, reviewed, compiled, or applied agreed-upon procedures with respect to any such future-oriented financial information or financial outlook and, accordingly, Ernst & Young LLP does not express an opinion or any other form of assurance with respect thereto.
Financial outlook and future-oriented financial information contained in this news release about prospective financial performance or financial position is based on assumptions about future events, including economic conditions and proposed courses of action, based on management’s assessment of the relevant information currently available. Readers are cautioned that any such financial outlook and future-oriented financial information should not be used for purposes other than for which it is disclosed herein. The prospective financial information included in this news release has been prepared by, and is the responsibility of, management and has been approved by management as of the date of this news release. The Company and management believe that prospective financial information has been prepared on a reasonable basis, reflecting the best estimates and judgments, and represent, to the best of management’s knowledge and opinion, the Company’s expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results. The preparation of any financial outlook is complex and is not necessarily susceptible to partial analysis or summary description and any attempt to do so could lead to undue emphasis on any particular factor or analysis. Furthermore, readers should not assume that any combined financial information included in this news release will be the actual financial position of the Company’s in the future. Prospective financial information is provided for illustrative purposes only.
Forward-looking statements speak only as of the date the statements are made. The forward-looking statements contained in this news release are expressly qualified in their entirety by the foregoing cautionary statements and those made in our other filings with applicable securities regulators in Canada. The Company assumes no obligation to update publicly or otherwise revise any forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable securities laws. If the Company does update one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect to those or other forward-looking statements.
NON-IFRS MEASURES
This news release includes certain non-IFRS measures and non-IFRS ratios. The Company believes that non-IFRS financial measures and non-IFRS ratios, when supplementing measures determined in accordance with IFRS, provide investors with an improved ability to understand how management analyzes results, show the impacts of specified items on the results of the reported periods, and allow readers to assess results without the specified items if they consider such items not to be reflective of the underlying performance of the company’s operations. Non-IFRS financial measures and non-IFRS ratios do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. This data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
The term “accretion” refers to the increase in the Company’s forecasted combined net earnings per share for the financial year ending December 31, 2026 after giving full effect to the disclosed synergies, effect to the Acquisition, the Offering, advances and funds expected to be drawn under the New Credit Facility, and any Acquisition-related adjustments, as if it had been completed on January 1, 2026, as compared to the Company’s forecasted net earnings per share for the financial year ending December 31, 2026 on a stand-alone basis.
In this news release, the Company uses the following non-IFRS financial measures and non-IFRS ratios with respect to the Company: EBITDA, Adjusted EBITDA, Kraken Net Debt and Adjusted EBITDA Margin are non-IFRS ratios.
- “EBITDA” is defined as earnings before interest, taxes, depreciation and amortization.
- “Adjusted EBITDA” is defined as earnings before interest expense, interest income, income taxes, depreciation and amortization, stock-based compensation expense (where relevant) and non-recurring impact transactions, if any. The Company considers this useful to investors to help them evaluate the underlying operating performance by presenting results on a basis which excludes the impact of certain non-operational non-cash and non-recurring items.
- “Kraken Net Debt” is defined as long-term debt including its current portion and deferred financing costs, bank indebtedness net of cash and cash equivalents, and leases. The Company considers this useful to investors as it assesses the Company’s overall leverage position and capital structure.
- “Adjusted EBITDA Margin” is defined as Adjusted EBITDA divided by the Company’s revenue. The Company considers this useful to investors as it demonstrates operating efficiency and underlying operational performance before the impact of capital structure and non-operational, non-cash, non-recurring items.
In this news release, the Company uses the following non-IFRS financial measures and non-IFRS ratios with respect to Covelya Group:
- “Covelya EBITDA” has the same definition as the Company’s definition of EBITDA, being earnings before interest, taxes, depreciation and amortization.
- “Covelya Adjusted EBITDA” is defined as earnings before interest expense, interest income, income taxes, depreciation and amortization, and non-recurring transactions.
- “Covelya Adjusted EBITDA Margin” is defined as Covelya Adjusted EBITDA divided by Covelya Group’s revenue.
In this news release, the Company uses the following non-IFRS and other financial measures in this news release with respect to the Company and Covelya Group on a combined basis, as based on Combined Financial Information, without any adjustments:
- “Combined Revenue” is Kraken’s revenue plus Covelya Group’s revenue. The Company considers this useful to investors to assess the combined operating performance of the company post-transaction.
- “Combined Adjusted EBITDA” is Kraken’s Adjusted EBITDA plus Covelya Group’s Adjusted EBITDA. The Company considers this useful to investors to assess the combined operating performance of the company post-transaction.
- “Combined Adjusted EBITDA Margin” is Combined Adjusted EBITDA divided by Combined Revenue. The Company considers this useful to investors to assess the combined operating performance of the company post-transaction.
- “Combined Net Leverage” is the Kraken Net Debt as at September 30, 2025, divided by Combined Adjusted EBITDA for 2025 after giving effect to the Acquisition, the Offering, advances and funds expected to be drawn under the New Credit Facility, and any Acquisition related adjustments. The Company considers this useful to investors as it measures the Company’s ability to cover its debt obligations over time.
EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin
This news release discloses EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin for the financial years ended December 31, 2023 and 2024. Explanations of the composition and usefulness of these measures and reconciliations of such measures to the most directly comparable IFRS measures can be found in the section entitled “Non-IFRS Measures” in the Company’s MD&A for the financial year ended December 31, 2024, which section is incorporated by reference in this news release and is available on SEDAR+ at www.sedarplus.ca.
The following table provides a reconciliation of EBITDA and Adjusted EBITDA to Kraken’s net income for the years ended December 31, 2023 and 2024:
| For the year ended December 31 | |||
| $ millions | 2023 | 2024 | |
| Net Income | $5.5 | $20.1 | |
| Income Tax | $0.8 | $(8.1) | |
| Financing Costs | $1.6 | $2.4 | |
| Interest Income | – | $(0.7) | |
| Foreign Exchange Loss / (Gain) | $1.0 | $0.0 | |
| Share-based Compensation | $0.4 | $0.9 | |
| Impairment of Goodwill | $2.8 | – | |
| Loss / (Gain) on Disposal Assets | $0.0 | ($0.0) | |
| Gain on Extinguishment of Contingent Consideration | ($4.0) | – | |
| Depreciation and Amortization | $4.9 | $5.7 | |
| EBITDA – Excluding Restructuring and Acquisition Costs | $13.0 | $20.5 | |
| Restructuring and Acquisition Costs | $1.1 | $0.2 | |
| Adjusted EBITDA | $14.1 | $20.7 | |
The following table provides a calculation of Kraken’s Adjusted EBITDA Margin for the years ended December 31, 2023 and 2024, and estimates for 2025:
| For the year ended December 31 | ||||
| $ millions | 2023 | 2024 | 2025E | |
| Revenue | $69.6 | $91.3 | $102.0 – $104.0 | |
| Adjusted EBITDA | $14.1 | $20.7 | $24.0 – $26.0 | |
| Adjusted EBITDA Margin | 20% | 23% | 24% | |
EBITDA and Adjusted EBITDA for 2025E are forward-looking non-IFRS measures, and Adjusted EBITDA Margin for 2025 is a forward-looking non-IFRS ratio, which have been computed in a manner consistent with Adjusted EBITDA and Adjusted EBITDA Margin, but which require the use of forward-looking information. See “Additional Underlying Assumptions”.
Covelya EBITDA, Covelya Adjusted EBITDA, and Covelya Adjusted EBITDA Margin
This news release discloses Covelya EBITDA, Covelya Adjusted EBITDA, and Covelya Adjusted EBITDA Margin for the financial years ended December 31, 2023 and 2024.
The following table provides a reconciliation of Covelya EBITDA and Covelya Adjusted EBITDA to Covelya Group’s profit for the financial year for each of the years ended December 31, 2023 and 2024:
| For the year ended December 31 | ||
| $ millions | 2023 | 2024 |
| Profit for the Financial Year | $15.5 | $28.7 |
| Income Tax Expense | $2.0 | $8.9 |
| Finance Costs | $1.2 | $1.6 |
| Finance Income | $(0.0) | $(0.1) |
| Depreciation of Property, Plant and Equipment | $4.8 | $6.3 |
| Depreciation of Right Of Use Assets | $1.4 | $1.5 |
| Amortization of Intangible Assets | $1.4 | $2.1 |
| Covelya EBITDA | $26.2 | $48.9 |
| Relocation Costs | $0.4 | $0.9 |
| Non-recurring Professional Fees | $0.4 | $0.3 |
| Non-recurring Legal Costs | $4.6 | – |
| Development / ERP Costs | $0.1 | $0.5 |
| Covelya Adjusted EBITDA | $31.8 | $50.6 |
The following table provides a calculation of Covelya Adjusted EBITDA Margin for the years ended December 31, 2023 and 2024, and estimates for the year ended December 31, 2025:
| For the year ended December 31 | |||
| $ millions | 2023 | 2024 | 2025E |
| Covelya Group Revenue | $169.5 | $214.0 | $249.0 – $275.2 |
| Covelya Adjusted EBITDA | $31.8 | $50.6 | $60.3 – $66.7 |
| Covelya Adjusted EBITDA Margin | 19% | 24% | 24% |
Covelya EBITDA and Covelya Adjusted EBITDA for 2025 are forward-looking non-IFRS measures, and Covelya Adjusted EBITDA Margin for 2025 is a forward-looking non-IFRS ratio, which have been computed in a manner consistent with Covelya Adjusted EBITDA and Covelya Adjusted EBITDA Margin, but which require the use of forward-looking information. See “Additional Underlying Assumptions”.
Combined Revenue, Combined Adjusted EBITDA and Combined Adjusted EBITDA Margin
Combined EBITDA, Combined Adjusted EBITDA and Combined Adjusted EBITDA Margin are Combined Financial Information.
The following tables provide the calculation of Combined Revenue, Combined Adjusted EBITDA, and Combined Adjusted EBITDA Margin for the years ended December 31, 2023 and 2024, and estimates for the year ended December 31, 2025:
| For the year ended December 31 | |||
| $ millions | 2023 | 2024 | 2025E |
| Revenue | $69.6 | $91.3 | $102.0 – $104.0 |
| Covelya Group Revenue | $169.5 | $214.0 | $249.0 – $275.2 |
| Combined Revenue | $239.1 | $305.3 | $351.0 – $379.2 |
| For the year ended December 31 | |||
| $ millions | 2023 | 2024 | 2025E |
| Adjusted EBITDA | $14.1 | $20.7 | $24.0 – $26.0 |
| Covelya Adjusted EBITDA | $31.8 | $50.6 | $60.3 – $66.7 |
| Combined Adjusted EBITDA | $45.9 | $71.3 | $84.3 – $92.7 |
| Combined Adjusted EBITDA Margin | 19% | 23% | 24% |
Combined EBITDA and Combined Adjusted EBITDA for 2025 are forward-looking non-IFRS measures, and Combined Adjusted EBITDA Margin for 2025 is a forward-looking non-IFRS ratio, which have been computed in a manner consistent with Combined EBITDA, Combined Adjusted EBITDA and Combined Adjusted EBITDA Margin for the financial years of the Company and Covelya Group ended December 31, 2023 and 2024, but which require the use of forward-looking information. See “Forward Looking Statements”, “Combined Financial Information” and “Additional Underlying Assumptions”.
Kraken Net Debt and Combined Net Leverage
The following table provides a calculation of Kraken Net Debt as at September 30, 2025, and Combined Net Leverage of the Company following the drawdown of the New Credit Facility, and the completion of the Offering and the Acquisition:
| $ millions | As of Q3-2025 | |
| Long-Term Obligations (Current and Non-Current Portion) | $24.1 | |
| Lease Liabilities (Current & Non-Current Portion) | $14.0 | |
| Kraken Total Debt | $38.1 | |
| Less: Cash and Cash Equivalents | $(126.6) | |
| Kraken Net Debt | $(88.5) | |
| Add: New Credit Facility | $150.0 | |
| Add: Covelya Lease Liabilities, as of Q3-2025 | $8.7 | |
| Combined Net Debt | $70.2 | |
| Combined Adjusted EBITDA (2025E) | $88.5 | |
| Combined Net Leverage | 0.8x | |
For further information, please contact:
Shant Madian, Director of Capital Markets
[email protected]
Erica Hasenfus, Director of Marketing
[email protected]
Investor Relations
[email protected]
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/14c22fc1-791d-46f6-88a0-a4f542ea8bdc
