Electro Optic Systems Holdings (ASX:EOS) launched a capital raising of up to AU$175 million via a fully-underwritten AU$150 million institutional placement and a non-underwritten share purchase plan to raise up to AU$25 million, according to a Monday Australian bourse filing.

The placement will result in the issue of around 18.8 million new shares to institutional investors at AU$8 apiece.

After the completion of the placement, the company will offer eligible existing shareholders the opportunity to apply for up to AU$30,000 worth of new shares under the share purchase plan. The firm added that it reserved the right to accept applications from eligible shareholders in excess of AU$25 million or to scale back applications that exceed that amount.

The proceeds are expected to fund the upfront consideration of the MARSS acquisition, provide working capital flexibility, and accelerate commercialization of new products, per the filing.

The company's securities were placed in a trading halt from the commencement of trading on Monday at its request, pending the announcement of the equity raising and to allow the "placement to take place in an orderly fashion."