Kraken Robotics Inc. (CVE:PNG) saw its stock climb 4.7% to C$6.67 during midday trading on Friday, July 3, 2026, following the completion of its C$615 million acquisition of Covelya Group. Despite the gain, shares remain well below the C$8.50 per share issue price paid to Covelya's seller and are trading 37.8% off their 52-week high of C$10.72.
The company announced the close of the Covelya deal on July 2, paying approximately C$615 million, subject to closing adjustments. The transaction was funded with C$480 million in cash and C$135 million in stock, representing 15.88 million shares issued at C$8.50 per share. Additionally, Kraken established a C$125 million secured term loan and expanded its revolving credit facility to C$60 million.
CEO Greg Reid described the acquisition as one that "positions Kraken as a global provider of mission-critical, dual-use subsea intelligence solutions." The seller now holds approximately 4% of Kraken's outstanding shares, subject to staged lock-up periods of 12, 18, and 24 months.
Kraken significantly raised its 2026 financial guidance, reflecting the anticipated contribution from Covelya. The new revenue midpoint stands at C$305 million, a 79% increase from the prior midpoint of C$170 million. The company now expects revenue in the range of C$290 million to C$320 million, up from the previous C$165 million to C$175 million range.
Adjusted EBITDA guidance was also revised upward, with a new midpoint of C$70 million (range C$65 million to C$75 million), compared to the prior C$45 million midpoint. However, the adjusted EBITDA margin guidance was trimmed to 22% to 23%, down from the earlier 24% to 29% range, reflecting the lower-margin profile of Covelya's operations.
Capital expenditure and intangible asset spending guidance was raised to C$30 million, up from C$16.5 million, reflecting investments needed to integrate and support the expanded business. The company's order book provides visibility into achieving the new revenue targets: Kraken reported 2026 orders of approximately C$110 million for its legacy business and C$182 million for Covelya, totaling C$292 million, which represents 96% of the updated revenue midpoint. However, the company cautioned that not all orders may convert to revenue in 2026.
Market reaction was muted relative to the guidance upgrade, with the stock still trading 21.5% below the C$8.50 deal price. Canaccord Genuity analyst Aravinda Galappatthige maintained a Buy rating and C$9.50 price target, implying about 42% upside from midday levels. The broader Canadian market provided support, with the S&P/TSX Composite rising 0.87% and the TSX Venture Index gaining 2.39% on the day, boosted by stronger mining stocks as softer U.S. jobs data pushed gold prices higher and reduced expectations for further interest rate hikes.
Krazen expects to report its second-quarter results in late August, followed by third-quarter results in late November, which will include Covelya's contribution for the first time. The company also plans to apply to list its common shares on the Toronto Stock Exchange, a process it expects to complete by the end of 2026 or early 2027.
