Israel Aerospace Industries (IAI) and Formula Systems have entered into a definitive agreement for the purchase of TSG – a subsidiary and the military arm of Ness Technologies, engaged in the fields of command and control systems, intelligence, homeland security and Cyber security.
The total purchase price in the transaction will be $50 million in cash, with each of IAI and Formula acquiring 50 percent of TSG for $25 million. The consummation of the transaction is subject to, among other things, obtaining certain regulatory approvals.
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TSG is a leading provider of core command and control systems to Israel’s defense organization, including the Israeli Defense Forces and the Israeli Police, and its activity is well suited for both parties. The acquisition represents the parties’ strategic decisions to expand their scope of activities, and to preserve leading positions in the markets where they operate, through M&A activity.
The parties will focus on turning TSG into a leader in its field in Israel, by maximizing the synergies between TSG, IAI and Formula and pursuing its expansion, among other ways, through mergers and acquisitions of companies that operate in complementary areas.
Joseph Weiss, IAI’s CEO and President, said: “The acquisition deepens our hold in the areas of command and control, intelligence and homeland defense, both in Israel and among foreign customers, and creates synergies between the products of the three companies to offer comprehensive end-to-end solutions to our customers.”
Guy Bernstein, Formula’s CEO, said: “The acquisition of TSG, a leader in its field, adds a significant fourth leg to Formula’s portfolio. This gives us a solid base on which we can build.”