Codan (ASX:CDA) subsidiary Codan US agreed to acquire US-based military networking communications technology business SKT2, known as Kagwerks, for AU$33.6 million in cash and five years of royalty payments, according to a Wednesday filing with the Australian bourse.

The royalties will be calculated on annual sales target thresholds ranging from 1% to 5%, the filing stated.

Completion is expected in early December, subject to regulatory conditions, according to the filing.

Under Codan, Kagwerks' revenue is expected to range from AU$49 million to AU$57 million in the first 12 months, the filing stated.