EOS sells off satcom arm EM Solutions

Defence manufacturer Electro Optic Systems has sold off its naval satellite communications arm EM Solutions only five years after buying the business, further focusing EOS on its core business of Remote Weapon Systems.

EOS entered into a binding share sale agreement to sell the Brisbane subsidiary to UK listed Cohort plc for an enterprise value of $144 million, freeing up capital for expansion elsewhere.

The proposed transaction aligns with EOS’ transformation strategy to focus on commercialising its intellectual property and growing its core product offerings in the areas of RWS, High Energy Laser Weapons and Space Control, according to the company.

In particular, EOS sees a compelling growth opportunity in the counter-drone market for both Remote Weapon Systems and High Energy Laser Weapons.

EOS CEO and Managing Director Andreas Schwer said: “The Proposed transaction clearly demonstrates EOS’ strategic focus and determination to succeed in the rapidly evolving and growing counter-drone market.

“We had strong interest from the market in the EM Solutions business, and by releasing capital at this time, we are very well placed to execute our EOS growth strategy.”

EOS flew high following its first big sales of its RWS products internationally and began an aggressive expansion into the US satellite communications market and through the purchase of EM Solutions for $26 million.

EM Solutions became the be the core for EOS’ thn-new Communication Systems business, adding to EOS’ existing Defence Systems and Space Systems business segments.

However the US satellite venture collapsed when EOS was unable to raise the huge sums to invest in a major satellite network, and supply of RWS to international customers was interrupted by the Covid pandeic.

Meanwhile EM Solutions continued to rack of sales of its satellite communications terminals that can access the internet even when a ship is experiencing rough seas.

While it is true that the sale provides EOS with the funding flexibility to more fully pursue other growth opportunities, it also marks a return by EOS to the businesses that originally made it a global success.

Schwer said: “We will continue to deploy capital in a disciplined way. Given the AUKUS partnership, we
believe that Cohort is the ideal owner for EM Solutions.”

Cohort supports entrepreneurial businesses grow and innovate in defence technology

Foreign Investment Review Board approval for the sale has been received.

Browse @AuManufacturing’s coverage of EM Solutions here.

Picture: Electro Optic Systems/Cobra naval satcom terminal