EOS is expanding their business with the purchase of microwave satellite communications specialist SME EM Solutions.
The company will form part of the new EOS Communication Systems segment (see below more on this). The shares/cash payment deal values the company at $26 million.
Brisbane based EM Solutions has a 20-plus year pedigree in this area, with numerous Defence and civil programs under its belt, including a win in the 2018 ADM Essington Lewis award for their work on the Cobra satcom terminals on board the Cape class patrol boats. These terminals have now been rolled out to other RAN fleets.
The EM Solutions business is equally split between civil and defence work, with the company working on a number of satcom projects in Australia and globally.
“EOS will now offer customers globally a range of proven communication solutions which are both leading edge and future proofed,” according to a statement from EOS. “These products will offer EOS customers a secure transition to the future of ultra-broadband space communications.”
EOS estimates that of the $400 million of space communications infrastructure that must be renewed in the next two decades, at least $120 billion will require a combination of performance features across microwave and optical domains, the bread and butter of the company.
“For the ADF, the new entity provides an even stronger sovereign capability in future communications,” EM Solutions Managing Director Dr Rowan Gilmore said. “We look forward to continuing to develop and improve our existing suite of on-the-move satellite communications products and flat panel antennas while now investing in future space communications technology as part of EOS."
New business segment
EOS has also established a new business segment to be named EOS Communication Systems. This business segment will be the third discrete business element in EOS, joining EOS Defence Systems and EOS Space Systems.
The launch of the new business was triggered by EOS completing several technology breakthroughs required for next-generation space communications, according to the company. EOS has invested around $250 million over nine years, including around $50 million of contributions from government partners in the US and Australia, towards achieving this outcome.
The final technology breakthrough clearing the path for the establishment of the communications segment was the achievement of new technology allowing specific laser effects in space to be achieved with typically 0.1 per cent of the power previously required.
The industrial and commercial applications of this technology are vast because the laser power density required for many space applications can now be achieved with much smaller lasers. In some cases including next generation space communications, this is an enabling step, according to the company.
“In recent years EOS has developed responsive production processes which allow rapid ramping up and down of production for aerospace products,” EOS Group CEO Dr Ben Greene said. “Access to these processes and EOS’ global supply chain will support efficient expansion of the communications business.”
ADM Comment: There is a very good chance that within the next 12 months, EOS will become Australia’s first owned and operated sovereign Defence prime with a turnover hitting the $1 billion mark.
Between their work on remote weapons stations, space and satcoms, the business has seen their market capitalisation double in the past two months on the ASX. And the business is only set to grow across all three sectors for both Defence and civil work. Their biggest issue will be managing the growing pains across their multiple sites in Australia and abroad.
PS. Keep an eye out for EM Solutions MD Dr Rowan Gilmore as the upcoming November edition From the Source interviewee.