Codan announces $33 million international purchase
One of South Australia’s top-performing companies has acquired a US military technology provider in a deal valued at over $30 million.
Mawson Lakes-based technology company Codan, the state’s fourth top company according to InDaily’s 2024 South Australian Business Index, announced its acquisition of US-based technology company SKT2 LLC dba Kägwerks (Kägwerks) today.
The acquisition, worth approximately $33.6 million upfront, will see Codan’s subsidiary Codan US acquire 100 per cent of the American company, which supplies the US Army with communications technologies. Completion of the deal is expected in early December, subject to regulatory conditions.
Founded in 1959, Codan provides communications technology to government, corporate, NGO and consumer markets globally, including through its Tactical Communications division.
The company has seen significant growth in the last 12 months, having recently moved from 11th place in InDaily’s 2023 South Australian Business Index to fourth place this year, with a revenue of $550 million in the 2024 financial year.
Kägwerks develops tactical operator-worn communications technologies for use in military environments, providing secure networking and connectivity through technology that gives real-time battlefield intelligence.
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Codan said the acquisition was in line with existing operations, already providing communications solutions to military and special forces, intelligence agencies and first responders.
“Kägwerk’s intellectual property has been field-tested and accepted into the US Department of Defence, and its proven pedigree enables us to participate in additional tenders for other Programs,” the company’s Tactical Communications president and executive general manager Paul Sangster said.
Kägwerks was selected as a provider of the US Army Nett Warrior Secure Wired and Wireless Intra-Soldier Network Hub (Nett Warrior Program) in 2022, supplying its DOCK product portfolio.
“[The DOCK] tactical operating system is designed to optimise battlefield intelligence by giving soldiers access to AI at the edge, ultimately increasing mission success and soldier safety,” said Codan.
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The acquisition, according to a company statement, will allow Codan to “broaden its offering as a full tactical military radio solutions provider and to build capability, credibility and scale in the core markets it operates in”.
On top of the upfront $33.6 million payment, the deal will involve royalty payments for five years, based on agreed annual sales target thresholds between 1 and 5 per cent.
Codan said it expected revenue from the acquisition to reach between $49 million and $57 million in the first 12 months, with a forecast EBITDA for the 2025 calendar year of between $8 million and $11 million.
“Together Tactical Communications and Kägwerks represent a full solutions provider that will increase opportunities across key military and law enforcement markets,” Sangster said.
Kägwerks president Niko Hughes said the company was “excited” about the deal.
“By partnering with Codan’s world-class manufacturing capabilities and top-tier suppliers, we are positioned to scale our operations,” Hughes said.
“This relationship empowers Kägwerks to expand our global presence and reach new markets, enhancing our ability to serve customers worldwide.”
