Electro Optic Systems (ASX:EOS) has announced it’s raising $40M as “geopolitical uncertainty [creates] supporting market conditions of remote weapon systems (RWS).”
The company highlighted counter-drone tech as being particularly in demand.
The company is raising $40M across two tranches.
Firstly, a $35M underwritten placement. This will be followed by a $5M share purchase plan.
The company intends to be left with around $73M after both exercises to support sales growth in “key global markets” by investing in critical weapons supplies.
Those critical weapons EOS is focused on are remote cannons – in other words, remotely controlled (or automated) mounted turrets capable of scanning a battlefield for enemies on their own.
In the relatively limited world of ASX defence stocks, EOS is one of the more serious companies in the space.
With a strong presence in the US military supply chain, the company advertises – tongue-in-cheek – its ability to provide “the unfair advantage” to customers browsing its website.
“The equity raising enables EOS to better capitalise on near-term growth opportunities by investing in long-lead items particularly cannons and other items,” EOS chief Dr Andreas Schwer said.
“EOS has significant near-term opportunities in RWS [Remote Weapons Systems] and particularly those with counter-drone applications, driven by geopolitical uncertainty and the changing nature of warfare.
“EOS’ customer base has widened and this equity raising will support servicing market demand for EOS’ innovative products. In 2023, EOS delivered record revenue and operating cash flow as well as implemented a number of initiatives to focus on the acceleration of organic group.”
Australian stockbroker Bell Potter in 2022 called a global defence thematic to uplift Australian defence stocks for the rest of the 2020’s – hopefully not beyond, but that’s not entirely unlikely either, the way things are seemingly going.
EOS last traded at $2.08.
