Israeli Defense Firm Tomer Values Itself Over $2.5 Billion, Plans Debt Raise
Translated & summarized from Bizportal by baba
Israeli state-owned defense firm Tomer, a key producer of missile propulsion systems, is set to raise up to 600 million shekels in debt. CEO Dotan Gabay estimates the company's value at over 10 billion shekels, driven by significant infrastructure and technology. The funds will support production expansion and new ventures, as the company experiences increased global demand fueled by recent conflicts and a worldwide shortage of such components. Tomer, spun off from IMI in 2015, aims to significantly grow its revenue and profitability in the coming decade.
The story in 6 lines · by baba
- Tomer CEO estimates company value at over 10 billion shekels, planning a 600 million shekel debt raise.
- The company manufactures critical propulsion systems for Israel's key missile defense and launch systems.
- Demand for Tomer's products has surged due to global conflicts and a worldwide production shortage.
- Tomer was established in 2015, inheriting vital rocket propulsion technology from Israel Military Industries.
- The company aims to increase revenue to 2.1 billion shekels by 2030 and expand international sales.
- A stock offering is not planned due to the strategic and classified nature of its components.
Tomer, an Israeli state-owned company that develops and manufactures propulsion systems for key missile systems, is preparing to raise debt for the first time in its history. CEO Dotan Gabay estimates the company's value at over 10 billion shekels (approximately $2.7 billion), significantly higher than its book value of 1.4 billion shekels. This valuation is based on substantial infrastructure and technological capabilities developed over years, which Gabay believes are worth far more than the company's current balance sheet reflects.
The company plans to raise up to 600 million shekels in bonds next month to expand production lines, enter new fields, and potentially pursue mergers and acquisitions. Gabay stated that while the company is not currently considering a stock offering due to its strategic and classified components, the debt issuance will allow for growth and investment. Tomer currently employs around 1,000 people and has an order backlog of 3.5 billion shekels, with a target of 2.1 billion shekels in revenue by 2030.
Established in 2015 following the privatization of Israel Military Industries (IMI), Tomer inherited crucial rocket propulsion knowledge and technologies. It supplies engines for the Arrow missile defense system, various precision rockets, and the Shavit satellite launcher. Gabay emphasized that Tomer operates independently, serving all major Israeli defense industries, including IAI, Elbit, and Rafael, fostering competition and better pricing for the Ministry of Defense.
The company has seen significant growth, with double-digit annual increases since 2019, accelerated by the Abraham Accords and the war in Ukraine. The Iron Swords War has further boosted demand, particularly for air defense systems, and has led Tomer to transition from limited production to mass production. Gabay sees a seven-to-eight-year window of opportunity to solidify the company's future through further investments and expansion.
Gabay also highlighted the global demand and shortage in rocket engine production, noting that Tomer's ability to meet these demands will be crucial for its long-term success. He expressed confidence in the company's technological edge, particularly in advanced propulsion for missile defense, and its ability to achieve a net profit margin of around 9% or more. The company is also exploring international markets, aiming for a 50-50 split between domestic and foreign sales by 2031.
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