Kraken Robotics Announces Closing of Strategic Acquisition of Covelya Group Limited, Updated 2026 Guidance and Appointments to Executive Team

Kraken Robotics Inc. (TSX-V: PNG, OTCQB: KRKNF), today announced the closing of its previously announced acquisition of Covelya Group Limited (“Covelya Group”), for approximately $615 million, subject to closing adjustments. Unless otherwise specified, all dollar amounts in this release are denominated in Canadian dollars.




MANAGEMENT COMMENTS
“This acquisition positions Kraken as a global provider of mission-critical, dual-use subsea intelligence solutions,” said Greg Reid, CEO of Kraken Robotics. “Since announcing the transaction, we have received positive feedback from customers who are looking forward to working with our combined engineering teams on integrated subsea technology solutions. We welcome the new employees to the team and look forward to the many benefits this combination can provide. 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. This positive long-term outlook is further supported by the expected increase in defence budgets globally, including growing investment in autonomous underwater systems.”

STRATEGIC RATIONALE
The Acquisition aligns with Kraken’s strategy to deliver value to customers through a portfolio of dual-use technologies and a culture of innovation. As previously announced, the strategic benefits to Kraken from the Acquisition include the following:

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.
Financial accretion across key metrics, including $10 million of cost synergies within 24 months.

NEW PRODUCT ORDERS AND UPDATED 2026 FINANCIAL GUIDANCE
Since reporting its Q1 2026 results on May 28, 2026, Kraken and Covelya have secured additional product orders of approximately $13 million and $17 million, respectively. These awards bring announced orders in 2026 to approximately $110 million for Kraken and $182 million for Covelya Group. Gross profit margins associated with these orders are consistent with historical gross profit margins.

Kraken is updating its 2026 guidance to reflect the Acquisition’s July 2, 2026, closing date and the inclusion of Covelya Group, which was excluded from the Company’s prior guidance.

LEADERSHIP TEAM AND ORGANIZATIONAL STRUCTURE
As part of its integration with Covelya Group and its subsidiary companies, Kraken is implementing a new organizational structure and strengthening its leadership team.

The new structure will consist of Kraken Group, which will focus on financial and organizational governance, and a clearly delineated Kraken Robotics operating business, whose business units will focus on operational excellence, strategic execution, and financial performance. These changes are designed to combine the strengths and talents of both organizations while creating a more efficient and scalable platform to support long-term growth.

In conjunction with these organizational changes, Bernard Mills has been promoted to President of Kraken. Bernard brings extensive experience leading large organizations and driving operational performance. Prior to joining Kraken, Bernard served as CEO and Managing Director of Stelia North America, an advanced materials subsidiary of the Airbus Group. Before that, he was President of Ultra Sonar Systems, where he led a global organization of more than 850 employees.

Kraken’s new Corporate Group leadership will be comprised of the following:

Greg Reid – Chief Executive Officer (CEO)
Bernard Mills – President (formerly Kraken EVP Defence)
Joe Mackay – Chief Financial Officer (CFO)
Terra Penrose – Chief People Officer (CPO)
John Salama – Chief Information Officer (CIO)
Andrew Griffin – Chief Legal Officer (CLO) (formerly Kraken Director, Legal)

The Executive Leadership Team working with Bernard within the Kraken Robotics operating business will include:

Simon Partridge – EVP Technology (formerly Chairman of Covelya Group)
Graham Brown – EVP Products (previously Managing Director at Covelya Group’s Sonardyne International subsidiary)
Gary Moynehan – EVP Enterprise Performance (previously CFO at Covelya Group)
David Shea – EVP Strategy & Growth (previously EVP Products and CTO at Kraken)
EVP Systems & Services, a newly created position that is currently vacant, with the Company in advanced stages of the recruitment process

Together, this team combines deep expertise across technology, operations, and growth initiatives to support the integration and future expansion of the combined company.

Nat Spencer, Chief Operations Officer (COO), will be leaving Kraken at the end of July to pursue a new opportunity. The Company thanks Nat for his many contributions to Kraken over the last several years and wishes him well in his future endeavours.

Kraken is establishing an integration plan with a dedicated team and will begin integrating employees, systems, finance, sales, and operations to realize potential revenue and cost synergies. As previously announced, Kraken is targeting approximately $10 million of cost synergies within the first 24 months.


Location: Toronto, Canada