July 2026 - My updated conviction
Six months ago, I viewed Kraken as an excellent Canadian defence growth company.
Today, I increasingly view it as a global subsea technology platform with exposure to defence, offshore energy, maritime infrastructure and autonomous underwater systems.
That is a broader and, in my view, more durable investment thesis and...
Canada's announcement today (July 7th) that it will acquire up to 12 new Subs from Thysel Krupp of Germany, only enhances the overall investment picture.
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Sonardyne International Limited, EIVA A/S, Forcys Limited, Wavefront Systems Limited, Voyis Imaging Inc., and Chelsea Technologies Ltd.
This acquisition is a "future tech" game changer as Kraken grows into a NATO and international partner in the sub sea robotics market.
For Kraken Robotics shareholders, I believe this acquisition is transformational.
I would argue it is the most important event in the company's history, even more significant than any individual NATO contract announced to date.
The Simple Version
Before the acquisition, Kraken was primarily known for:
- Synthetic Aperture Sonar (SAS)
- Underwater batteries
- Minehunting systems (KATFISH)
- Subsea imaging and robotics
After the acquisition, Kraken becomes something much larger:
A vertically integrated global subsea defense and maritime technology company capable of supplying most of the critical systems needed by autonomous underwater vehicles, mine warfare systems, subsea surveillance networks, and naval intelligence platforms.
This moves Kraken from being a niche supplier to becoming a potential "prime-level" subsea technology partner.
Why Sonardyne Matters
The crown jewel here is Sonardyne International.
Sonardyne is one of the world's leading providers of:
- Underwater navigation
- Acoustic positioning
- Underwater communications
- Tracking systems
- Autonomous vehicle guidance
These technologies are used by:
- NATO navies
- Offshore energy companies
- Undersea infrastructure operators
- Research organizations
Think of Sonardyne as the underwater equivalent of GPS and communications infrastructure.
Kraken previously could "see" underwater using SAS.
Now it can also:
- Navigate underwater
- Communicate underwater
- Position underwater assets
- Track underwater assets
That is a major leap.
Why This Is Important For NATO
The NATO naval buildout is increasingly focused on:
- Autonomous underwater vehicles (AUVs)
- Uncrewed surface vessels (USVs)
- Mine countermeasures
- Arctic surveillance
- Protection of pipelines and subsea cables
- Seabed warfare
The challenge is that these systems require multiple technologies:
| Capability | Provider |
|---|---|
| Sonar imaging | Kraken |
| Batteries | Kraken |
| Navigation | Sonardyne |
| Communications | Sonardyne |
| Survey software | EIVA |
| Underwater imaging | Voyis |
| Environmental sensing | Chelsea |
| Sonar enhancement | Wavefront |
Kraken can now offer much of this package itself.
That makes Kraken substantially more attractive to:
- NATO navies
- Defence primes
- Naval system integrators
Why EIVA Is A Big Deal
EIVA brings advanced software and autonomous mission planning.
Many investors focus on hardware.
The highest-margin businesses in defense often become:
- Software
- Data processing
- Mission management
-
AI-enabled decision support
EIVA adds these capabilities and gives Kraken recurring software revenues.
Voyis Is Another Hidden Gem
Voyis Subsea Laser imaging
Voyis Imaging provides world-class underwater optical imaging.
Combining:
- Kraken SAS sonar
- Voyis imaging
creates a powerful intelligence package for:
- Mine detection
- Cable inspection
- Port security
- Underwater surveillance
This combination could become a preferred solution for NATO mine warfare operations.
The Revenue Impact
The numbers are substantial.
Management indicated the combined company would have approximately:
- $365 million revenue (2025 basis)
- ~24% adjusted EBITDA margins
- More than 700 customers
- Approximately 1,200 employees
- Operations across North America, Europe, Asia-Pacific and South America.
For perspective:
A few years ago Kraken was a small-cap Canadian ocean technology company.
This acquisition potentially turns it into one of the
largest publicly traded subsea technology firms in the world.
Why This Helps Future NATO Contracts
This may be the biggest investment implication.
Previously Kraken might win a contract for:
- Sonar
- Batteries
- Minehunting equipment
Now Kraken can bid for larger portions of a naval program.
Instead of selling a sensor, Kraken can help deliver an integrated system.
Defense ministries generally prefer fewer suppliers and integrated solutions.
That increases:
- Contract size
- Customer stickiness
- Long-term support revenue
- Follow-on procurement opportunities
Exactly the type of revenue NATO modernization programs generate.
The Main Risk
There is one major risk.
The acquisition cost:
$615 million.
To finance it Kraken raised significant capital and added debt.
So shareholders must monitor:
- Integration execution
- Debt management
- Synergy realization
- Customer retention
If management executes well, the acquisition could be highly accretive.
If integration struggles, the size of the deal means mistakes would be costly.
Bottom Line For A Long-Term PNG Investor
If your thesis is that NATO, Canada, the UK, and allied nations will dramatically increase spending on:
- Mine warfare
- Undersea surveillance
- Arctic security
- Autonomous naval systems
- Protection of subsea cables and energy infrastructure
- (Ed Note: it is our thesis)
then this acquisition strengthens that thesis considerably.
Before Covelya, Kraken was a highly specialized technology supplier.
After Covelya, Kraken begins to look more like a global subsea defense technology platform with sonar, batteries, navigation, communications, imaging, software, and autonomous systems under one roof.
From an investment perspective, I view this as moving PNG from a "promising Canadian defense tech company" toward a potential "underwater defense systems champion" serving NATO and allied navies over the next decade.
The key question is no longer whether Kraken has excellent technology—it is whether management can successfully integrate a company nearly as large as itself and convert that scale into larger defense awards.
Ed Note:
I believe this is the rocket fuel Kraken needed to become a complete, international entity
and a strong NATO partner!
