Electro Optic Systems Holdings Ltd (ASX: EOS) shares are pushing higher on Thursday.
In morning trade, the ASX defence stock is up 2.5% to $8.12.
Why is this ASX defence stock rising today?
Investors have been buying the defence and space company's shares this morning after it made a positive announcement.
According to the release, EOS has now completed the acquisition of the MARSS business for an upfront consideration of US$36 million (A$50.4 million).
There is also an earnout component, which has a maximum cap of EUR140 million (~A$227 million).
MARSS is a Europe-based provider of command and control (C2) systems, which are critical for effectively countering drones. Its proprietary C2 technology, NiDAR, provides advanced artificial intelligence (AI)-enabled decision making and sensor-effector orchestration to rapidly counter asymmetric drone threats.
EOS notes that by combining its own best-in-class effector and sensor capabilities with MARSS' C2 technology, it is transforming from a component supplier to an integrated counter-drone systems provider, with strong software and AI capabilities.
Earlier this month, the company revealed that MARSS had secured new orders totalling EUR102 million (~A$165 million) from an existing customer in the Middle East to take its existing order book to EUR135 million (~A$217 million).
It notes that the addition of MARSS' A$217 million order book to EOS' existing A$509 million order book would illustratively increase EOS' total order book to A$726 million. This bodes well for its near-term sales growth.
'A significant addition'
Commenting on the transaction, the ASX defence stock's CEO and managing director, Dr. Andreas Schwer, said:
We are pleased to have completed the MARSS acquisition – this is a significant addition to EOS' capability. In recent months, the MARSS NiDAR platform has been protecting critical assets in the Middle East from drone attacks. We welcome the MARSS team to EOS and look forward to working together to secure and execute the commercial opportunities that lie ahead.
The CEO of the MARSS business, Johannes Pinl, added:
We are very proud of the MARSS team and the success of the NiDAR Counter-Drone Command and Control platform. With systems and personnel supporting operations across the Middle East, MARSS remains committed to protecting critical sites and advancing our capabilities. We are pleased to become part of EOS and look forward to growing our business together.
The post Here's why this ASX defence stock is charging higher today appeared first on The Motley Fool Australia.
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