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  • Electro Optic Systems (EOS) is on track to acquire all of the business and assets in space communication company Audacy Corporation
  • Through its subsidiary, EOS will spend $10 million on the purchase and costs associated with securing mandatory U.S. licences
  • However, the transfer of control is subject to review and approval by the U.S. Federal Communications Commission
  • While this cannot be assured, EOS believes the purchase is in line with regulatory requirements
  • EOS shares skyrocketed 6.29 per cent in mid-morning trade, now trading for $10.47 apiece

Electro Optic Systems (EOS) is on track to acquire all of the business and assets in space communication company Audacy Corporation.

Acting through its wholly-owned U.S. subsidiary, EOS Defence Systems USA (EOSDS), it will outlay approximately $10 million in cash for the purchase including substantial costs associated with securing mandatory licenses.

EOSDS is an Alabama corporation and until recently it was mainly focused on the establishment of U.S. production capacity for EOS’ remotely controlled weapon systems and unmanned aerial systems products.

The company was restructured during 2019 to support wider range of EOS business activities in the U.S. in the space, space communications and missile defence sectors.

Audacy was granted a space station spectrum licence by the U.S. Federal Communications Commission in June 2018, allowing to use specific microwave spectrum bands for communications to and from specific satellites.

Space station licences are legal permits which allow an entity to establish, operate and maintain communications satellites.

These licences are a statutory requirement for all microwave communications and are controlled and coordinated globally by the International Telecommunications Union (ITU).

Acknowledging the current dominance of microwave technology, EOS has decided to enter the regulated microwave communications domain as one of several channels it intends to apply to commercialise its optical, microwave, and hybrid microwave communication technologies.

This purchase of Audacy opens a channel in space for EOS to support market demand, however, transfer of control is subject to review and approval by the Federal Communications Commission (FCC).

EOSDS will also file for review of the purchase by the U.S. Committee on Foreign Investment in the U.S. (CFIUS).

Although EOS believes that the purchase is compliant with all statutory and regulatory requirements, approval by the FCC and CFIUS cannot be assured.

If approved, EOS anticipates the acquisition to close mid-2020.

“Following [the] completion of this acquisition, EOS will be able to build a satellite network that will provide a comprehensive, end-to-end communications and data transfer service to government and commercial customers globally,” EOSDS Chairman Ambassador John Berry said.

“We are confident of achieving all mandatory milestones required by the spectrum licences granted to Audacy including a requirement to build and launch satellites that will achieve a capability in space by June 2024,” he added.

EOS shares skyrocketed 6.29 per cent in mid-morning trade, now trading for $10.47 apiece at 11:48 am AEDT.

EOS by the numbers
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