Shares of Kraken Robotics surged 9.4% to $4.70 on June 18 after the Canadian underwater-technology firm announced it has received all regulatory and stock exchange approvals needed to close its $615 million acquisition of UK-based Covelya Group, with closing now set for July 2, 2026. The company confirmed the deal is expected to finalize on that date, calling it "highly strategic and transformative." The removal of the last regulatory overhang explains the pop — but the harder questions about integration and valuation are just beginning.
A Small Fish Swallowing a Whale
Kraken posted consolidated revenue of just $102.2 million in 2025.
The combined entity reported $365 million in revenue for that year with an adjusted EBITDA margin (earnings before interest, taxes, depreciation, and amortization as a share of revenue) of 24%. In other words, Covelya is roughly 2.5 times the size of stand-alone Kraken by revenue. The $615 million price tag breaks down into $480 million in cash and $135 million in new Kraken shares issued to the seller, Sonardyne Holdings. That cash component was partly financed by a $350 million public offering of subscription receipts , meaning significant dilution and new debt sit on the balance sheet before a single synergy is realized.
Defence Spending Is the Bet Behind the Price Tag
Recent conflicts in Ukraine and the Middle East have demonstrated that unmanned systems provide transformative capabilities, and the energy sector is simultaneously adopting them to cut costs — creating a surge in demand for maritime drones and counter-drone technology.
By combining Kraken's robotics and sensor technologies with Covelya's positioning, navigation, and communication systems, the merged entity aims to sell integrated packages for subsea operations. The strategic logic is sound, but execution risk is steep for a company that had roughly 500 employees absorbing a combined workforce of approximately 1,200 with over 450,000 square feet of global production capacity.
The Numbers Still Need to Prove the Story
Kraken's stand-alone 2026 guidance calls for $165–$175 million in revenue and $40–$50 million in EBITDA, representing over 65% revenue growth and 80% EBITDA growth year-over-year.
Combined guidance reflecting Covelya will only be issued at closing.
Meanwhile, the stock's trailing price-to-earnings ratio sits at an extraordinary 850 times , meaning investors are paying for years of future growth today. If integration stumbles or defence budgets shift, that premium unwinds fast.
Bottom line: The regulatory green light removes deal-break risk. What remains is whether a C$2 billion company can smoothly absorb a transformative acquisition and convert defence tailwinds into the profits its valuation demands.