Rafael Advanced Defense Systems Ltd.

In January 2019, Rafael and Avichai Stolero bought Yavneh-based unmanned aerial vehicles company Aeronautics in order to compete with Elbit Systems in the area of unmanned aerial systems. The acquisition had a valuation of Israeli new shekel (ILS) 850 million, which represents a 70% premium on Aeronautics' market capitalization. On completion of the acquisition, Aeronautics was de-listed and converted to a privately held company. Rafael financed its share of the acquisition cost--about ILS400 million--with cash on hand. At the same time, Rafael also bought 50% of Kanfit for ILS80 million in cash (total value of ILS160 million). Kanfit is a company that manufactures complex materials used to build remote-piloted vehicles. The stable outlook reflects our expectation that in the next

...There will be solid revenue visibility for the next few years, supported by high demand for the company's products and a constant increase in the company's backlog, bolstered by continuing M&A. In the past few years, Rafael's signed orders backlog has continued to increase, reaching about $6.55 billion as of September 2019. The increased backlog supplies Rafael with good revenues for two-to-three years. In December 2019, Rafael won an Israel Ministry of Defense classified tender worth billions of shekels to provide the Israel Defense Forces with intelligence systems. The contract is for work over an estimated 20 years, and includes developing and supplying intelligence gathering systems and command and control systems. The systems will serve the Israel Air Force, the IDF Intelligence Unit, and the Israeli GOC Army Headquarters. Demand for Rafael's products from the Israeli Ministry of Defense remains high. In January 2019, Rafael and Avichai Stolero bought Yavneh-based unmanned aerial vehicles...

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