- Electro Optic Systems (EOS) teams up with engineering and tech specialist Nova Systems to form a missile development business
- The two companies will form the Sovereign Missile Alliance (SMA) joint venture to compete for a Government sovereign missile enterprise program
- The billion-dollar program is designed to bolster Australia's sovereign defence industrial capability
- EOS and Nova hope to be chosen as enterprise partners for the program to help manufacture the needed precision weapons
- Shares in Electro Optic Systems are up 4.58 per cent and trading at $4.34 each at 11:06 am AEST
Defence tech maker Electro Optic Systems (EOS) is teaming up with engineering and tech specialist Nova Systems to form a missile development business.
EOS told shareholders this morning it will form the Sovereign Missile Alliance (SMA) in a joint venture with Nova to compete for an upcoming Federal Government sovereign missile enterprise program.
Prime Minister Scott Morrison announced the billion-dollar program, known as the Sovereign Guided Weapons and Explosive Ordnance Enterprise, alongside the Federal Defence Minister in late-Match this year.
The Prime Minister said at the time the program is designed to bolster Australia's sovereign defence industrial capability.
"Creating our own sovereign capability on Australian soil is essential to keep Australians safe, while also providing thousands of local jobs in business right across the defence supply chain," the Prime Minister said.
To support the program, the Federal Government said it would choose an "experienced strategic industry partner to build a sovereign capability" to manufacture the needed precision weapons.
This is where EOS, through its joint venture with Nova Systems, hopes to come in.
The industry partner chosen by the Federal Government to help carry out the guided weapons program will be responsible for research and development, education and training, testing and evaluation, manufacturing, and more for the weapons systems.
According to EOS, the SMA with Nova has a "unique set of attributes" that aligns it with the government's requirements for an industry partner.
These attributes include sovereignty, scale, a supply chain network, and decades of defence experience, among others.
Electro Optic Systems CEO Dr Ben Greene said the SMA will establish a "sustainable, domestic capacity" to build missiles under licence.
"We have the core competencies, advanced R&D capabilities, existing IP, and established technology partnerships to create the next generation of guided weapons optimised for Australian requirements with full sovereign ownership and control," Dr Greene said.
Nova Systems CEO Jim McDowell said: "The sovereign capability to deliver guided weapons already exists in-country and the SMA creates an Australian owned entity of scale with the required capabilities, resources, funding and established relationships across the broader Defence ecosystem to start this journey with the Commonwealth now."
The Federal Government forecasts the guided weapons enterprise could be worth $40 billion by 2040, though according to EOS, analysts estimate this figure could be closer to $100 billion.
An exact timeline for when the Federal Government will choose its industry partners has not been given, but EOS said today it expects to see decisions and awards from 2022 onwards.
It seems investors like EOS' chances; shares in Electro Optic Systems were up 4.58 per cent and trading at $4.34 each at 11:06 am AEST. The company has a $655 million market cap.