Electro Optic Systems buys satcom company

Canberra’s Electro Optic Systems ASX:: EOS) has bought satellite communicatons systems maker EM Solutions for a total of $26 million in cash and shares.

The company will be added to EOS’s new communications systems business segment, announced in @AuManufacturing news earlier this week.

EOS is a leading manufacturer of remotely operated weapons systems and laser space communications, with this third segment vastly augmented with EMS’s established defence customers.

EMS has satellite communications engineering skills, and manufactures a range of civilian and military satellite communications systems such as the Cobra naval system (pictured).

The company also builds line of sight communications equipment, microwave subsystems and a unique ‘satcom on the move’ mobile system.

EMS systems are in service with Australia’s army and navy, winning awards such as the Essington Lewis Trophy in 2018 and the defence sme team of the year for innovation.

EMS shareholders will receive 4.3 million EOS shares and $1.5 million in cash, and EME CEO Rowan Gilmour will remain with the business.

Gilmour said: “For our customers, the new group offers a deeper capital base, access to further leading edge research and much greater support capability offshore.

“For the Australian defence force, the new entity provides an even stronger sovereign capability in future communications.”

EOS said in a statement that the purchases would be immediately earnings accretive, with EMS expecting growth of 45 per cent in the next two years.

EOS should be able to expand EMS’s markets through its global customer network, including in the United States and the Middle East.

EOS said: “EOS will now offer customers globally a range of proven communications solutions which are both leading edge and future proofed.

“These products offer EOS a secure transition to the future of ultra-broadband communications.”

Picture: EM Solutions

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