TSG Acquires 51% Stake in Israeli Defense Firm for 28 Million Shekels
Defense firm TSG announced the acquisition of a 51% stake in an Israeli manufacturing company for 28 million shekels, aiming to expand its engineering capabilities amid recent stock declines.
Defense and technology company TSG announced on Wednesday the acquisition of a 51% stake in an Israeli firm specializing in engineering, manufacturing, and the assembly of complex systems for 28 million shekels.
Although the acquired company's name was not disclosed, financial data published by TSG highlights a highly profitable business that posted revenues of 43.7 million shekels and a net profit of approximately 9 million shekels in 2025. The transaction values the target company at roughly 54.9 million shekels, reflecting a price-to-earnings multiple of about 6.1 based on its 2025 results. Its net profit margin reached approximately 20.6% of revenues, a notably high figure for manufacturing operations, though TSG noted the financial data was provided by the target firm itself.
The acquisition comes during a challenging period for TSG's stock, which fell 9.6% over the past week, 7.7% over the past month, and roughly 56.5% since the beginning of the year. As of Tuesday's market close, the company traded at a market capitalization of about 757 million shekels. Following the announcement, TSG shares traded up 6.3% on Wednesday, with investors showing interest due to the high profitability of the acquired company relative to the deal price.
The initial consideration of 28 million shekels will be paid from TSG's existing sources upon closing. The agreement also includes options to acquire the remaining shares in two phases, in 2030 and 2032, with future exercise prices determined by factors including the target company's EBITDA and agreed multipliers.
TSG, which employs approximately 900 people, operates in the defense, homeland security, and municipal systems sectors, counting the Ministry of Defense, defense contractors, and local authorities among its clients. CEO Arik Kilman stated that the acquisition aims to expand the company's defense capabilities and integrate technological, engineering, and manufacturing expertise under one roof.
