Despite a cooling trend in the Tel Aviv IPO market and sharp declines in the share prices of defense industry companies over the past few months, the influx of firms from this sector to the local exchange continues. "Globes" has learned that Civan Lasers is currently preparing for an IPO on the Tel Aviv Stock Exchange at an estimated pre-money valuation of NIS 1.2-1.8 billion.
The flotation is expected to take place in the coming months. Civan Lasers aims to raise between NIS 250 million and NIS 350 million from local investors. At the same time, some of the company’s existing shareholders, among them Elah Fund and US investment firm First Manhattan, which together hold approximately half of the shares, are expected to sell a portion of their holdings through an offer for sale.
Civan Lasers was founded in 2008 by serial entrepreneur Dr. Eyal Shekel. It specializes in the production of high-power lasers. In its early years, operating largely under the radar, the company focused on the civilian sector, with its products used for welding advanced materials. In recent years, however, the company has expanded into the defense sector. It provides one of the core technologies for the Iron Beam (<i>Or Eitan</i>) laser-based defense system , which was developed by Rafael in collaboration with Elbit Systems. The company also applies its technology to optical communications in the air and in space.
Iron Beam, which was delivered to the IDF late last year, is designed to serve as a complementary layer to existing defense systems (Iron Dome, David’s Sling, and Arrow), aiding in the defense against rockets, missiles, UAVs, and drones.
The system's primary advantage lies in the cost of interception. While an interception by the Iron Dome is estimated to cost approximately $30,000, an interception using Iron Beam costs only about $5-10. Laser-based interception does, however, face challenges, including a significant drop in efficiency in cloudy or hazy conditions, and the need for widespread deployment of the systems.
Arbitration resolves dispute with Elbit
Civan Lasers is based at the Har Hotzvim industrial park in Jerusalem. It employs about 200 people. The company entered the defense sector a few years ago at the time of a capital-raising round in which Elbit Systems participated. Over the years, Elbit Systems has invested a sum estimated to be under $10 million in the company, and currently holds about 5% of its shares. In addition to this equity stake, Elbit Systems was granted exclusive rights to sell the product in the defense market, a provision that subsequently led to a dispute between the parties.
Earlier this year, Civan petitioned the court to modify its agreement with Elbit Systems, seeking the right to market laser systems based on its proprietary technology for military applications independently. Following a mediation process overseen by the Ministry of Defense, the parties reached a settlement: sales of Civan’s technology within Israel are to be conducted exclusively through Elop, an Elbit Systems subsidiary specializing in laser technology, while in international markets Civan is permitted to sell systems with an energy output below the one-kilowatt threshold independently.
Civan Lasers is believed to have generated annual revenues in the tens of millions of dollars in recent years. However, against the backdrop of surging demand for technology within the defense sector, it is estimated that the company holds a backlog of future orders amounting to hundreds of millions of dollars, both in Israel and abroad. This backlog is expected to support the high valuation at which Civan hopes to launch its IPO.
The company’s most recent funding round was at an estimated valuation of $350 million (NIS 1.1 billion), with projections suggesting that the company could secure an even higher valuation in the upcoming IPO. Furthermore, some within the company are aiming for a significantly higher valuation-in the range of $550-600 million (NIS 1.7-1.8 billion).
A serial entrepreneur
Founder Eyal Shekel, who holds over a quarter of the company’s shares, stands to benefit from a substantial exit. Shekel, who holds a PhD in physics and is an expert in electro-optics, has been involved in a series of technology companies and ventures, several of which have resulted in successful exits over the past few decades.
Among his ventures, he was a co-founder of telecommunications firm Chiaro, which focused on the development of optical communication systems. In the 1990s, the company raised nearly $225 million, a record sum for an Israeli firm at the time. However, it shut down in 2005, following a decline in telecommunications investment in the wake of the dot-com crash.
Subsequently, Shekel, together with Ephraim (Efi) Gildor, founded Al Cielo. The company served, in effect, as a spin-off, utilizing patents developed at Chiaro for both military and civilian applications, with a particular focus on the aviation industry. In late 2007, Al Cielo, in which approximately $1 million had been invested, was sold to the UAV manufacturer Aeronautics for roughly $20 million.
Will the wave of defense IPOs continue?
The anticipated IPO of Civan follows a wave of public offerings on the local capital market over the past two years. This year alone, 21 new companies have joined the Tel Aviv Stock Exchange, listing their shares at a combined valuation of NIS 33 billion. This figure marks a high point for the Tel Aviv Stock Exchange since the wave of IPOs seen in 2021, a trend spurred by the Covid-19 crisis.
Defense companies have featured prominently in this wave. No fewer than seven such firms went public, seeking to replicate the success of other stocks in the sector-shares that have surged over the past three years by tens, and in some cases even hundreds or thousands, of percent. This growth has been driven by the wars in Ukraine and, subsequently, Israel, as well as the arms race initiated by many nations.
This trend reached a peak in early June with the IPO of Bagira, a manufacturer of defense simulators. The offering was based on a post-money valuation of approximately NIS 3.4 billion, the largest IPO by a defense company ever on the local market. This followed a series of successful public offerings by smaller companies. Perhaps the most notable among these is RP Optical, a manufacturer of optical and electro-optical products for the industry.
Published by Globes, Israel business news - en.globes.co.il - on October 19, 2026.
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