No financial details were disclosed of the all-Israeli acquisition deal.
Herzliya-based S&W Media Group specializes in Internet advertising and developing apps for smart TVs.
Elbit Systems' orders backlog totaled $9.8 billion at the end of the second quarter.
Rafael's accumulated profits are estimated at NIS 2.5 billion.
After the NIS 850 million acquisition, Rafael and Avihai Stolero will each hold 50% of the Israeli UAV developer and manufacturer.
Sources close to the company said that price for the deal was between $20 million and $30 million.
In line with its new global strategy, Danish catering and cleaning services company ISS is exiting Israel.
ClickSoftware founder Moshe BenBassat: What happens to my people, whom I worked with for 20 years, is very important to me. The atmosphere in the deal was one of mutual commitment.
All parties involved in the Israeli software testing company's ownership in the past 20 years have made a large profit on their investments.