Ondas Buys Israeli Defense Unit for $27M

Ondas Holdings Inc., a leader in autonomous drone and robotics solutions, has significantly expanded its Israeli footprint with the acquisition of Aran Defense from Aran Mo'ap. The deal, valued at approximately $27 million (100 million shekels) in Ondas stock, marks Ondas' first acquisition of a publicly traded Israeli company's division. This strategic move follows the recent appointment of former Mossad chief Dedi Barnea as Ondas' Global President and Chairman, signaling a deepening commitment to the Israeli defense technology sector.

The acquired entity, Aran Defense, encompasses the development and manufacturing services division of Aran Mo'ap. This unit is a certified supplier to prominent defense industry players, specializing in advanced manufacturing equipment such as injection molding machines and robotics. For Aran Mo'ap, the divestiture allows it to concentrate on its core businesses in plastic and recycling technology, medical startups, and software services. The transaction is expected to yield Aran Mo'ap a pre-tax profit of around $20 million (75 million shekels).

This acquisition represents Ondas' sixth strategic investment in Israeli defense technology and its most substantial to date. The company has previously acquired several Israeli firms, including Airobotics, Apeiro Motion, Sentrycs, 4M, and a controlling stake in SPO. These investments underscore Ondas' strategy to integrate cutting-edge Israeli innovation into its global offerings, particularly in autonomous systems and secure communication solutions.

The Israeli defense sector is a global powerhouse, consistently driving innovation in areas like unmanned aerial systems (UAS) and artificial intelligence. Ondas' continued investment aligns with this trend, leveraging the deep talent pool and technological expertise resident in Israel. The company, led by CEO Eric Brock, is actively building a robust portfolio of advanced defense capabilities, further bolstered by the integration of high-profile Israeli security figures like Barnea and Oshri Lugassi, who manages Ondas' defense operations.

Aran Mo'ap, which was trading at a market capitalization of approximately $58 million prior to the announcement, saw its stock price surge following the news. The company's controlling shareholders, led by Chairman Aharon Cohen, hold about 46% of its equity. The deal is subject to customary closing conditions, including regulatory approval from Israel's Competition Authority.

Ondas, a NASDAQ-listed entity with a market capitalization nearing $5.2 billion, has demonstrated significant growth, reporting record revenues of $83.8 million in its latest second-quarter results, a 67% increase year-over-year. While the company is investing heavily in expansion, leading to increased net losses, it has raised its full-year revenue forecast to between $525 million and $550 million and anticipates achieving positive EBITDA by the fourth quarter of 2027. The company also recently secured a multi-million shekel contract from the Israeli Ministry of Defense for next-generation tactical attack drone capabilities.