Acquisition summary: EM Solutions (EMS) is being acquired for AUD$144m to access the fast-growing Naval satellite communications market. CY24E revenue of AUD$55m and a 25.5% operating margin implies a purchase multiple of 10.3x CY24E EBIT. It will operate as the seventh business within Cohort, reporting through Communications and Intelligence. Completion is expected by end December. Australian FIRB approval has been received. It will be Cohort’s largest acquisition to date. Rationale: The business brings a new military communications capability with strong IP, known for precise tracking in tough sea states. Revenue is expected to almost double over the next 3 years given its strong backlog, servicing and growing market. Furthermore, it bolsters Cohort’s foothold in Australia and EMS’s position in Europe. CY23 revenue was split 46% Australia, 49% Europe and 5% RoW. EMS has a strong order book, a larger pipeline, and is known by Cohort having worked with subsidiary EID. It is being acquired from Australian listed EOS (N/R), which is heavily indebted. Trading update: Cohort current trading is slightly ahead of expectations. For H125, the Board expects revenue +11%, adj. profit +50% to at least £9m, which reduces the H2 weighting, and net cash of c.£30m. Estimate changes: We upgrade FY25/26/27E adj EPS by 0.8%/20.0%/22.1% to 45.0p/56.6p/66.1p. No synergies are assumed. We believe risk remains to the upside. We forecast FY25E net debt of £15m, returning to net cash of £9.3m and £29.2m in FY26E and FY27E. Our view: This acquisition, carefully selected by an experienced team, not only enhances Cohort’s earnings, margin and prospects at a reasonable price but also its strategic value. Our 12m TP rises to 1200p, BUY.