BSA Limited (ASX: BSA) has entered into advanced discussions to acquire Australian tethered drone business Eonetics for A$17.5 million through a scrip-based transaction. The proposed deal would give the sellers approximately 39.9% of the expanded company and broaden BSA's capabilities beyond telecommunications services. BSA has cautioned that the agreement remains non-binding because one seller, CCGF Ventures-FZCO, has not yet signed.
Proposed Terms and Consideration
The proposed consideration comprises 50 million BSA shares at a deemed issue price of A$0.35 each. Twenty million shares would be escrowed for 12 months, another 20 million for 18 months, and 10 million would have no escrow. Sellers would also receive 24.5 million unlisted three-year options with exercise prices between A$0.40 and A$1.00, plus 30 million performance shares tied to revenue targets.
Strategic Rationale
BSA says the combination would pair its national field workforce with Eonetics' aerial systems to expand inspection, surveillance, and connectivity services. It also sees cross-selling opportunities across both customer bases and faster deployment of Eonetics technology. The group believes the deal positions it for convergence of telecommunications infrastructure, autonomous aerial systems, critical infrastructure monitoring, and AI-enabled field operations.
Technology and Market Position
Eonetics, founded in 2020 by Aidan Kelly and formerly known as XM2 Earth, builds tethered drones that receive continuous power and fiber from the ground. Its Melbourne designed and manufactured systems can carry 15 kilogram payloads, operate at altitudes of 120 meters, and deliver 4,500 watts of power. Eonetics serves customers and partners in the United States, Europe, and allied-country government, telecommunications, defense-adjacent, and emergency response markets.
Company Context and Customers
BSA brings more than 25 years of experience delivering fixed line and wireless telecommunications services, smart metering, and electric vehicle charging solutions. Its customer base includes Foxtel, the NSW Telecommunications Authority, Bluecurrent, Yurika, Waveconn, and Telstra. The company has restructured in recent years, divesting fire maintenance assets and appointing Sasho Kacevski as CEO in 2025.
Conditions and Approvals
Completion remains subject to several conditions beyond CCGF Ventures-FZCO signing the agreement. BSA must complete confirmatory legal due diligence, obtain shareholder approval, and secure regulatory and third-party approvals. The parties may terminate if conditions are not satisfied or waived within 90 days of execution unless they agree to a later date.
Board Composition and Dilution
On completion BSA would have 125.3 million ordinary shares on issue, with the sellers holding approximately 39.9% before options or performance shares convert. No seller is expected to exceed a 19.9% relevant interest, and the sellers could nominate one non-executive director. That nomination right would lapse once their combined holding sits below 10% for more than 10 consecutive days.
Milestones and Financial Considerations
BSA has not disclosed Eonetics revenue, earnings, or a standalone valuation. The 30 million performance shares would vest in three tranches if aggregate sales revenue reaches A$5 million, A$7.5 million, and A$10 million between January 2027 and December 2029. BSA reported approximately A$16.8 million in cash as of June 30, 2026, and does not propose a capital raising.
The proposed acquisition represents a significant strategic pivot for BSA after several years of restructuring and asset sales. While the aerial technology offers potential new revenue streams and international reach, the transaction remains conditional and financially unquantified. Shareholders will likely weigh the promise of Eonetics against the substantial equity dilution before the expected general meeting in November 2026.