Mer Group Completes Business Turnaround, Eyes Defense and Data Centers
The Israeli company Mer Group, formerly known as a traditional communications infrastructure contractor, has undergone a significant transformation over the past two years. Under the leadership of Chairman Nir Lampert and CEO Avi Shechter, the company has divested unprofitable ventures, such as old African mobile projects, and refocused its resources on high-tech, profitable areas. This strategic shift has resulted in a more agile, multi-dimensional business model with improved cash flow.
Mer Group now operates in three complementary sectors experiencing strong demand. These include the development and supply of AI-integrated tactical communication, video, and electro-optical systems for the Israel Defense Forces' leading armored platforms like Merkava and Namer, with recent international expansion including a $6 million drone defense system deal in India. The company also provides comprehensive homeland security and intelligence solutions for sensitive facilities, ports, and borders, integrating its SMART-M platform with sensors and cyber capabilities. Furthermore, Mer Group is entering the micro edge AI data center market, building facilities up to 2.5 megawatts near clients for rapid local AI processing, which has already secured $6 million in contracts in Central America.
The company's financial turnaround is equally striking. Mer Group reported new orders and wins totaling approximately NIS 393 million since the start of 2026, primarily in the defense sector, boosting its total order backlog to about NIS 972 million. The company's second-quarter results showed a 13% revenue increase to NIS 169.3 million, a 16% rise in gross profit to NIS 36.1 million, and a 33% jump in net profit to NIS 10.2 million. Notably, Mer Group has eliminated over NIS 100 million in net financial debt, moving to a cash surplus of NIS 12 million and strengthening its equity to NIS 182 million. This financial resilience has enabled the board to approve a NIS 10 million dividend, the first in over a decade.
Despite potential risks from currency fluctuations and global supply chain issues, Mer Group's stock has risen 43% year-to-date, trading at a market value of approximately NIS 660 million. The company is currently valued at a price-to-earnings ratio of about 14, which is considered attractive compared to other defense and infrastructure companies on the Tel Aviv Stock Exchange. Mer Group's successful business and financial overhaul positions it as a growing, profitable technology and defense entity with a strong order backlog and a promising data center venture.
