Yaron Mizrahi, chairman of Bagera Systems, spoke publicly for the first time since the company’s listing earlier this month at EY’s mergers and acquisitions conference. The event brought together senior executives from public companies and focused on whether Israel is entering a new wave of M&A after a strong run in the stock market, even as shares have fallen in the past month.
Mizrahi pushed back against the market talk that Israel should privatize state defense giants Israel Aerospace Industries and Rafael. Instead, he said the government should help small and mid-sized defense companies grow. “There is great value in government-owned industries, it is not all economics,” he said, arguing that defense production has major national value, especially in wartime. He said large companies in markets such as Germany, Britain and the United States often act as subcontractors for smaller firms, helping new defense players emerge. He also said Israelis are strong in creativity and daring, but weak in scaling, planning and caution.
He addressed Bagera’s IPO, completed on June 5, noting the stock has fallen 8% since then. Mizrahi said the listing was not a sale, but a way to bring in the public and institutional investors as partners. He said the public platform gives the company transparency, capital and a stronger position in winning government contracts worth hundreds of millions of euros in Europe and globally. He added that the company sees an opportunity in the shortage of strong global simulation and training firms, and that the listing prepares Bagera for future growth, acquisitions and consolidation abroad.
Roi Kahlon, head of the Government Companies Authority, said state defense firms IAI, Rafael and Tomer compete with “hands tied,” compared with private rivals such as Elbit Systems and international competitors. He said approvals for their acquisitions can take 6 to 12 months, versus about 10 days at Elbit, because the deals require government and authority approval.
The conference also featured comments from Hagai Shreiber of Phoenix, Ofer Yannay of Nofar Energy, Sigal Regev of Danal and Chen Golan of Next Vision. Shreiber said the market has reacted coolly to the expected end of the war with Iran. Yannay said pessimism can create buying opportunities and that he returned to the CEO role because of AI’s impact on energy. Regev said Danal is still learning from past acquisitions, while Golan said Next Vision expects to make several M&A deals in the next five years and may buy a company soon.
