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EOS launches into the $400B space communications market

Telecommunication
ASX:EOS      MCAP $301.0M
01 October 2019 00:00 (AEST)

Electro Optic Systems (EOS) will acquire Brisbane’s space communications company EM Solutions (EMS).

EOS has purchased 100 per cent of all issued shares in EMS in exchange for 4.2 million EOS shares and $1.4 million. The new shares will be subject to a six month escrow period.

This values EMS at approximately $26 million.

Recently, EOS achieved a number of advances which together enable next-generation optical communication to and from space at bandwidths up to 20 times higher than microwave technology.

Microwave is a line-of-sight wireless communication technology that uses high frequency beams of radio waves to provide high speed wireless connections that can send and receive voice, video and data information.

“The company has long recognised that over $400 billion is currently invested in microwave communication infrastructure in space and that this sunk cost and the all-weather capabilities of microwave technology will ensure a long term role for microwave technology in space communications,” EOS said.

EMS is a world leader in on-the-move satellite communications. It is a major provider of satellite communication system for the Australian Defence Force (ADF), including Royal Australian Navy ships.

In 2018, EMS was recognised for its advanced technology, winning awards such as the Essington Lewis Trophy.

The company believes EMS’ on-the-move radio and satellite products deliver high speed telecommunications anywhere in the world to its customers.

EMS CEO Dr Rowan Gilmore says that EM solutions is delighted to become part of the EOS group.

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

“For the ADF, the new entity provides an even stronger sovereign capability in future communications,” he added.

EOS CEO Dr Ben Greene says he is pleased to join forces with EMS to address the next generation of space communication needs.

“The culture of excellence and innovation which EMS has developed and maintained aligns well with EOS’ own values,” he said.

EOS has estimated that in the next 20 years, $400 billion of space communications infrastructure must be renewed.

At least $120 billon will require a combination of performance features across the microwave and optical domains which EOS is now equiped to provide.

Dr Ben believes that regardless of its merits, any disruptive technology must be eased into this market, not imposed.

“EOS has valuable new contributions to make, but a crafted approach to the space communications market was required,” he added.

The company will now offer customers globally a range of proven communication solutions which are both leading edge and future-proofed.

These products will offer EOS customers a secure transition to the future of ultra-broadband space communications.

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