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It is a $40 million deal to provide sonar for the Danish navy
Kraken Robotics Systems Inc. has landed a major contract to provide new sonar systems for the Royal Danish Navy.
The contract, worth $40 million, is the biggest one to date for the company, which has offices in St. John’s and Halifax.
Kraken Robotics is a publicly-traded company, listed on the Toronto Stock Exchange (TSX-V: PNG, OTCQB: KRKNF)
“We beat out a lot of really heavy hitters in the industry." — Shauna Cotie
Shauna Cotie, marketing manager for Kraken, told SaltWire the contract is a huge step forward for the company. Their largest contract prior to this one was a $9 million deal, she said.
“We beat out a lot of really heavy hitters in the industry” for the Danish contract, Cotie said,
The other bidders included Northrop Grumman International Trading Inc., Thales DMS France, and Klein Marine Systems Inc., noted a news release.
Northrup Grumman is one of the world’s largest military technology providers with revenues in the billions of dollars and had held a contract before with the Royal Danish Navy. Kraken had actually been chosen as the winning bidder for the sonar systems last October, but the deal could not be finalized because a complaint process was filed by one of the losing bidders.
The onset of COVID in Europe then slowed down government activity, causing further delay in the complaint process.
Earlier this month, the Board of Complaints, which oversaw the complaint process, ruled in favor of the Royal Danish Navy’s position on all points, clearing the way for the contract with Kraken to be finalized.
Under the program, Kraken will deliver the KATFISH towed synthetic aperture sonar, the Tentacle winch and Autonomous Launch and Recovery System (ALARS) to the Royal Danish Navy.
The total contract value is expected to be between $35-million and $40-million, with the majority of that received over a two-year equipment acquisition phase.
Cotie added that under the contract, Kraken will also provide ongoing service for the technology. The company expects to finalize matters with the Royal Danish Navy during the third quarter of 2020.
To prepare for the work, the company has been in hiring mode. Kraken now employes 112 people, including some hired recently to prepare for the work involved with the Danish contract.
Cotie said the company will continue to hire as the Danish contract is finalized.
“It’s great to have some good news for the Maritimes,” she said. “In a time of COVID, when most companies seem to be laying off people … the ocean technology sector is fairly robust.”
More than that, she said, this major military contract will help Kraken build its reputation and help solidify its presence in the global oceans technology field.