Elbit expects more acquisitions after deal for IMI closes

Israeli defense firm Elbit Systems, which is in the final stages of buying state-owned rival IMI Systems, is already on the hunt for more acquisitions, CEO Bezhalel Machlis said on Tuesday.

The government said it expects to complete the NIS 1.8 billion sale of weapons maker IMI by July 1, pending regulatory approval. The deal will likely make Elbit the country’s biggest defense contractor.

Elbit, a maker of drones, pilot helmet displays and cybersecurity systems, also reported on Tuesday higher fourth-quarter net profit on record revenue.

“The acquisition of IMI will allow us to sell more, mainly around the world, and allow more production,” Machlis told Reuters.

He said the deal would bring synergies primarily to three areas: long-range precision rockets, active protection for land-based systems, and guided munitions.

Machlis said there is a trend in the industry toward consolidation, and he expects Elbit to buy more companies.

“Our target markets are the United States, Europe, Australia... We are continuing to look for acquisitions,” he said. “Our balance sheet can support this. There are a few things we are looking into in depth in Elbit’s target markets.”

Machlis said some defense budgets globally were on the rise, with the areas in which Elbit is focused receiving increased priority.

(Reuters)