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Canberra-based defence and space technology company Electro Optic Systems Holdings (ASX: EOS) is acquiring European counterpart MARSS in a deal potentially worth up to $228 million that the company says will position the group as a global integrated counter-drone systems provider.
The deal, which comprises an up-front cash payment of US$36 million ($54 million), comes with a potential earn-out payment of up to €100m ($174 million) which will be largely payable in Electro Optic shares.
MARSS, which was founded in 2006, is a defence and security technology provider focused on surveillance, sensor fusion technology and integrated Command & Control (C2) systems which are key to counter-drone technology.
Electro Optic Systems says the acquisition will create an “integrated, end-to-end solution for countering drones” from detection, identification, and defeat.
The company says this will allow EOS to act as “a true counter-drone system provider and to compete for larger, higher-value programs as a prime contractor”.
“This includes the delivery and operation of turn-key solutions for the protection of critical infrastructure in the military, homeland security and civil domain, such as airports or power plants,” says the company.
The acquisition includes MARSS’ NiDAR C2 technology, its sensor fusion and AI software platform and hardware, and its customer contracts, intellectual property and personnel.
Electro Optic Systems plans to embed the AI-enabled NiDAR technology into its existing remote weapon system product range.
The deal also expands the geographic footprint of EOS and broadens its market presence through the defence, homeland security and civil relationships that MARSS already has in place, while significantly strengthening the Canberra group’s in-house artificial intelligence and software development capabilities.
Electro Optic Systems notes that the acquisition will be largely neutral for earnings and operating cashflow in 2026 but will start contributing in 2027.
The acquisition will be funded from existing cash reserves, which stood at $107 million on 31 December 2025.
Today’s announcement comes on the heels of Electro Optic Systems clearing the decks in November of a legacy issue with the Australian Securities and Investments Commission (ASIC).
The company reached a $4 million settlement with ASIC over earnings disclosure failings in 2022 when Electro Optic Systems failed to disclose changes to its revenue guidance to the market and overstating the amount by as much as $112 million.
Electro Optic Systems’ shares were trading 11c higher at $9.91 at 12.46pm (AEDT).
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