Electro Optics makes ’30mm lethality a reality’ with $21m capital raising
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Aussie weapons maker Electro Optics Systems has raised $20.9 million to fund the supply of 600 weapon systems to US defence manufacturer Orbital ATK.
Orbital ATK — which is itself being swallowed up by security giant Northrop Grumman in a $US9.2 billion deal — is buying $170 million worth of EOS’s latest R-400S-Mk2 weapon system.
The R-400S-Mk2 is a high-tech gun turret designed deliver 30 mm firepower from lightweight vehicles.
The canon allows the operator to aim and fire the weapon from the safety of a tank or under armour without compromising accuracy by using sensors and infrared cameras.
The compact system provides light vehicles with “unprecedented access to firepower normally reserved for much heavier armoured vehicles”, according to Electro Optics (ASX:EOS).
“Precise mobile engagements up to 2 km with 30 mm lethality are now a reality,” the company’s marketing material says.
“Ours is the only product in its weight class that can take a 30mm cannon — and that is a big step up from the machine guns that have been mounted in the past,” Electro Optics chief Dr Warwick Holloway told Stockhead.
“We have the best motion control stabilisation and accuracy that has been demonstrated.”
Electro sold 9.1 million shares at $2.30 each to raise the $20.9 million in funds. The placement was oversubscribed “and received strong participation from new and existing shareholders”, the company said.
“The raise allows for us to support that sort of production activity by making sure we can cover the supply chain and actually build the infrastructure,” he told Stockhead.
“It is always difficult to predict how things are going to go in the defence space but momentum is always helpful.”
More than 1200 of the company’s remote weapon stations have been shipped internationally so far, for use with the Australian Defence Force, US Army and in Singapore.
If all goes to plan, cumulative orders of its latest R-400S-Mk2 weapon system will exceed $500 million this year.
Eletroc shares closed at $2.65 on Wednesday, valuing the company at $161 million.