Communications & Systèmes, a specialist in mission critical systems, launched July 2 a capital increase to raise €10.2 million (U.S. $11.9 million) and finance an announced expansion in European defense and security.

The rights issue is intended to raise finance for a mergers and acquisition plan, dubbed Plan Ambition 2021, and follows the approval June 26 by a CS shareholders meeting for the acquisition of Novidy’s, a cybersecurity company.

“I am rather delighted. This is a step forward,” CS CEO Eric Blanc-Garin told Fifth Domain July 2. “The capital increase will enlarge the shareholder base, bring in more institutional investors and improve the stock liquidity.”

The main aim is to fund the company’s expansion by mergers and acquisition.

“We have targets; we are in active discussion,” he said, when asked if CS has a list of companies in its M&A plan.

An issue of new stock is intended to raise €10.2 million, which could rise to €11.5 million if the offer meets demand from the stock market. The new stock will be priced at €5.90 per share, a 22.2 percent discount on the closing price June 28. Current shareholders are offered two new shares for every 25 shares held.

A core shareholder, Sopra Steria Group, has committed to subscribe to the stock issue. Sopra Steria holds 10.36 percent of CS and has pledged to inject €1.1 million into the company by exercising its preferential rights.

“This capital increase will allow CS to have the means necessary to realize other operations of external growth with priority in Europe in the growth sectors of defense and civil security, space and cybersecurity,” the company said in a statement. Current shareholders will have a preferential right for subscribing to the stock issue.

The shareholders meeting approved the capital increase, which had been announced as a second step in the Plan Ambition 2010 and follows the agreed offer for Novidy’s.

The acquisition of Novidy’s boosts CS’s annual sales in cybersecurity to €40 million, with the sector accounting for 20 percent of the company’s total revenue, the company said in a June 26 statement.

“We are delighted that our shareholders have unanimously approved this acquisition, which allows CS to mark a new stage in its development,” Blanc-Garin said in the statement. “This is the first significant step in our strategic plan, Ambition 2021.”