Overview

Deal closed: October 2019
Oasis M&A mandate: Sell-side
Sectors: Defence, Technology
Sub-sectors: Satellite Communications Systems

Background & motivation

EM Solutions (EMS) is a designer and manufacturer of on-the-move satellite communication systems for the Australian defence force, including Royal Australian Navy ships. The owners of EMS were looking to list on the ASX and engaged Oasis M&A to run an alternative strategy of selling the business should the listing not be possible.

Challenges

This campaign was conducted against the backdrop of EMS management also considering an initial public offering and listing. As such, offers presented by Oasis M&A to the stakeholders of EMS were considered in the light of the higher valuations that could be expected from an entity listed on the ASX.

This meant Oasis M&A had the challenge of managing of valuation expectations. This was eventually overcome by the receipt of a competitive offer which provided the vendors of EMS the opportunity to participate in the valuation growth of the acquirer.

Approach

Oasis M&A approached a large number of companies in the traditionally slow-moving defence sector, as well as in the allied sectors of communications, engineering, electronics, and private equity.

Results

The acquirer, Electro Optic Systems (EOS), is an Australian-listed technology company (ASX:EOS) operating in the space and defence markets. Its products incorporate advanced electro-optic applications based on EOS core technologies in software, laser, electronics, optronics, gimbals, telescopes and beam directors, and precision mechanisms.

EOS provided a competitive valuation for EMS that included an equity swap. In the months following the completion of the acquisition, the share price of EOS increased dramatically, increasing the value of the deal for the shareholders to almost double the initial consideration.