It has already been one of the wildest ASX defence stock moves of the past year, and Electro Optic Systems Holdings Ltd (ASX: EOS) is climbing again today.
At the time of writing, the EOS share price is up 8.15% to $9.16.
That means the stock is still down around 3% in 2026, but remains up more than 620% over the past 12 months.
Today’s buying comes after the company gave investors a fresh update on its MARSS acquisition, new Middle East orders, and a much larger combined order book.
MARSS deal moves closer
In its ASX release, EOS said it has agreed revised terms for its acquisition of the assets of the MARSS group business.
MARSS is a counter-drone systems business. Its NiDAR command and control systems are used to detect, track and defeat drone attacks.
The company said the upfront payment of US$36 million is being made today. It also expects the acquisition to complete in coming days.
There is still no guarantee on timing, but the update suggests the deal is moving closer after earlier transaction uncertainty.
EOS also said it will draw down $70 million from a secured term loan facility to help fund the deal. Of that amount, $50 million will go towards the upfront payment, with the balance expected to support transaction costs and general funding needs.
New orders land in the Middle East
The likely part that is getting investors most interested today is the jump in MARSS’ contract pipeline.
EOS said MARSS has secured new May 2026 orders totalling 102 million euros, or about $165 million. Those orders came from an existing customer in the Middle East.
MARSS has also entered an 85 million euro contract with another Middle Eastern military customer.
The contract involves installations for a country-wide drone detection and mitigation system, with NiDAR C2 software at its core.
Most revenue is expected to be earned during 2026 and 2027, with about 70% of cash expected across that period.
Order book gets bigger
The update also gives investors a clearer view of the combined order book.
EOS said MARSS’ order book now stands at 135 million euros, or about $217 million. If the deal completes, this would lift the company’s total order book to a massive $726 million.
The existing order book has also grown from $459 million at the end of December to $509 million on 15 May.
Foolish takeaway
While the MARSS deal is not finished yet, it appears to be moving in the right direction.
If EOS signs off on the deal, the share price could push into new all-time highs. The market would be looking at a bigger business, more defence orders, and stronger exposure to drone defence spending.
The post EOS shares rocket as $726 million order book turns heads appeared first on The Motley Fool Australia.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Electro Optic Systems. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.