Elbit Systems restructuring cyber subsidiary

Bezhalel Machlis  photo: Tamar Matsafi

Cyberbit's defense business is being transferred to the parent company.

Today, two years after defense company Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) acquired NICE Systems Ltd.'s (Nasdaq: NICE; TASE: NICE) cyber division, called Cyberbit Solutions, Elbit System has announced that it is restructuring Cyberbit's activity. While restructuring is usually a response to a poor state of business, Elbit Systems is emphasizing that that its current measure is a result of Cyberbit's growth.

Based in Ra'anana, Cyberbit provides a range of intelligence, information management, call interception, and cyber security services. The company's customers come from both the defense market (homeland security agencies) and the civilian sector (commercial companies). As part of the restructuring, Cyberbit's defense and cyber intelligence business activity will be split off and assigned to Elbit Systems' Land and C41 division, while the civilian cyber business activity will remain in Cyberbit.

Elbit Systems' announcement said that cybersecurity demand had grown, with the modern battlefield requiring both enhanced computer security and intelligence (C41) and cyber (C51) capabilities. The company therefore decided to integrate this business in its Land and C41 division in the hope that the cyber solutions would reach more customers. Elbit Systems says that its Land and C41 division "offers high synergistic value in these areas and many years of operational experience to best meet these market needs." The company adds that its civilian cyber activity has grown in recent years. In order to maintain this growth and be more customer-oriented in its specific markets (financial institutions, infrastructure protection, etc.), Elbit Systems has decided to concentrate its civilian cyber activity under the existing Cyberbit brand, which it says has accumulated a reputation in the field. "We are witnessing substantial growth in both the defense cyber and commercial cyber sectors and we anticipate to further broaden the activities of each sector separately,” Elbit Systems president and CEO Bezhalel Machlis says. "The reorganization will enable us to better deal with future challenges of each growing market, to best match our offerings and to position ourselves as global leaders in each field."

Controlled by Michael (Mickey) Federmann, Elbit Systems has a market cap of $5.7 billion, following a 52% surge in the company's share price over the past year. Elbit Systems acquired NICE Systems' intelligence and cyber division in 2015 for $158 million, and demanded $15 million in compensation several months later, alleging that inaccurate presentations had been made. The two parties to the agreement eventually reached a compromise that included additional expenses from NICE Systems in 2016 and a $4 million reduction of the additional payment due on the basis of future performance.

Published by Globes [online], Israel Business News - www.globes-online.com - on September 18, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

Bezhalel Machlis  photo: Tamar Matsafi
Bezhalel Machlis photo: Tamar Matsafi
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