Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) and Formula Systems Ltd. (Nasdaq: FORTY; TASE: FORT) have entered into a definitive agreement to buy TSG. The two companies will pay $50 million for TSG, a subsidiary and the military arm of Ness Technologies, which provides command and control, intelligence, homeland security and cyber security systems. IAI and Formula will each pay $25 million cash and own 50% of TSG.
TSG supplies core command and control systems to the Israel Defense Forces and Israel Police. 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.
IAI CEO and president Joseph Weiss said, "Acquiring TSG reflects our strategy of expanding and deepening IAI's involvement in relevant markets. 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." Formula CEO Guy Bernstein said, "The acquisition of TSG, a leader in its field, adds a significant fourth leg to Formula's portfolio, extending our reach to the defense and growing cyber security industries. This gives us a solid base on which we can build. We can think of no better partner in this acquisition than Israel Aerospace Industries and look forward to our close collaboration."
Published by Globes [online], Israel business news - www.globes-online.com - on January 14, 2016
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