News Analysis – August 2017

General News Summary

Temple Mount Troubles

It took an otherwise unfortunate incident, an Israeli security guard at the country’s embassy in Amman, killing two Jordanians who attacked him, to give Prime Minister Benjamin Netanyahu an opportunity to extricate himself from a crisis stemming from his own previous misjudgment. At the insistence of King Abdullah of Jordan (and with mediation efforts from the U.S.), Netanyahu was compelled to remove metal detectors and the infrastructure for security cameras that had been placed at the entrances to the Temple Mount in Jerusalem, about a week earlier, in response to a terrorist attack on the Mount in which two Israeli policemen were killed.

Tensions remained near the boiling point even after the security devices were removed and the Wakf, the Muslim religious trust which was given authority over the Mount after Israel reunified Jerusalem in the 1967 Six-Day War, had declared victory. Rioting and clashes with Israeli Police around the Mount, Islam’s third holiest site after Mecca and Medina, seemed to confirm what many Israelis had said all along – that the protests were politically inspired and that increased security was never really the issue.

There’s little doubt that Israel, which has responsibility for security in the Old City of Jerusalem, had the right to deploy the security devices around the Mount. It’s equally clear that doing so would provide an opportunity for Palestinian elements who have been claiming, with little basis in fact, that Israel was making changes that endangered the site of the al-Aqsa Mosque and the Dome of the Rock in violation of the so-called “status quo” in place since 1967.

According to various reports, the decision to install metal detectors at the Mount was taken in telephone discussions rather than at a formal meeting of the government or the smaller security cabinet. In the initial decision-making process, Netanyahu took the side of rightist-nationalist members of his government while discounting the misgivings expressed by Nadav Argaman, head of the Shin Bet internal security service and ignoring the distinct possibility that metal detectors would inflame passions among Palestinians and across the Arab world.

Incidentally, a survey published in late July by Martin Kramer, a Middle East scholar at Jerusalem’s Shalem Institute, quotes published reports over the past two decades about metal detectors at a number of shrines and holy places in the Islamic world – at the Imam Reza shrine in Mashhad, Iran, Sayyida Zainab near Damascus, Syria, the mausoleum of Ayatollah Khomeini in Teheran, at a shrine in Karbala, Iraq, and the Ibn Tulun Mosque in Cairo.

In the days after removal of the detectors, Muslim worshipers continued to stay away from the Temple Mount, an indication that the violence which had already flared up may not have subsided – even though a Muslim religious leader, the Mufti of Jerusalem, said that the Palestinians had won a victory. In addition to the two murdered policemen, that violence had already claimed the lives of three Palestinians in clashes with police and the horrific slaughter of three members of a family after Sabbath dinner in their West Bank settlement home.

The decision to remove the security devices, a clear reversal of Netanyahu’s original stance, has come under severe criticism from the Israeli right, including Education Minister Naftali Bennett and Justice Minister Ayelet Shaked of the Jewish Home party and members of his own Likud party, who accuse the prime minister of capitulating to Palestinian demands. In one surprising development Israel Today, the free Hebrew-language daily owned by U.S. casino billionaire Sheldon Adelson, castigated Netanyahu for what it said was “surrender” to Palestinian demands, a stance which deserves special attention because Adelson has previously been a staunch Netanyahu supporter.

For his part, Netanyahu sought to repair some of the domestic political damage, at the expense of his international image, with two actions: Recommending the death penalty, which hasn’t been invoked since the early 1960s, for the terrorist murder of the three West Bank settlers, and a public embrace of the security guard at Israel’s embassy in Jordan, who killed two Jordanians after he was attacked with a screwdriver in his Amman residence. The embrace came under fire from King Abdullah of Jordan, who had permitted the return of the guard to Israel as part of the Temple Mount metal detector deal. The king called the embrace provocative and demeaning, and said the guard, whose diplomatic immunity is questionable, should be returned to Jordan for interrogation and possible criminal trial. Meanwhile, the prime minister made a few more statements that could only curry favor with his right-of-center supporters: He called for drafting of a bill that would expand Jerusalem’s municipal borders to take in settlements that have till now been part of the West Bank, and he promised “to act” against some of what he called inflammatory broadcasts from Jerusalem of Al Jazeera, the Quatari-owned Pan Arab TV station.

If many Israelis favored a get-tough approach in the wake of the Temple Mount violence, an opposite view was expressed the day after the decision by Eran Lerman, a researcher at Bar-Ilan University, located just outside Tel Aviv. Lerman, a colonel in the IDF reserves, says the army’s policy of systematic tough action against possible perpetrators of terror attacks and avoiding, as much as possible, alienation of the general West Bank population by imposing harsh measures, is the result of cost-benefit analysis and not ideology, “The benefits of a much harsher line, in terms of reducing the current spasmodic pattern of violence, are uncertain. The costs are sure to be high, not least in terms of the opportunities – which would be lost in the case of escalating measures – to boost Israel’s relations with key players in all four corners of the world. These considerations have now withstood the test of the dramatic events on the Temple Mount, and proved as relevant as ever.”

The Submarines and other Affairs

Public opinion polls continue to show Prime Minister Benjamin Netanyahu remaining as the most popular choice to hold on to the top spot if elections were to be held right now, but Netanyahu seems to be losing some of his grip on political primacy in the wake of continuing accusations involving him. Two of them – acceptance of lavish gifts from wealthy business friends, and possible collusion with a newspaper publisher over curtailing the power of a rival publication in exchange for favorable new and editorial coverage – seem serious enough. So does the Prime Minister’s possible involvement with embattled businessman Shaul Elovitch, who is the subject of a police investigation over financial manipulations involving Bezeq, Israel’s largest telecom firm. None of them, however, has the explosive potential of a deal, now suspended by the Germans due to possible corruption, for the purchase of three new submarines from German shipbuilder ThyssenKrupp.

Several close Netanyahu associates, including his relative and personal lawyer David Shimron, were detained in early July as part of a police investigation launched almost six months earlier. The investigation centers around Netanyahu’s determination to push through the purchase of the submarines to protect Israel’s offshore natural gas fields; the deal, which involved 1.5B including substantial grants from the German government, did not have the backing of then-defense minister Moshe (Bogie) Ya’alon and Chief of Staff Lt. Gen. Gadi Eizenkot, who contended that the vessels were too expensive and not necessary. Shimron, whose clients include Michael Ganor, the ThyssenKrupp representative who has signed an agreement to be a state’s witness in the case, claims that Netanyahu was unaware of his connection with the German ship maker. Netanyahu has made similar assertions.

In addition to Shimron and Ganor, those taken into custody include Eliezer Marom, a former Israel Navy commanding officer, and former general Avriel Bar-Yosef, who was nominated by Netanyahu, but didn’t accept, to be head the National Security Council. They have been questioned in connection with possible offenses including accepting bribes, fraud, tax and money laundering violations.

There have been, at least so far, no public indication that Netanyahu is suspected of criminal offenses. But Ya’alon, who quit the Netanyahu government and his Knesset seat last year over his objection to the sub deal and Netanyahu’s treatment of the controversy over the killing of a wounded terrorist by an Israeli soldier in Hebron, now says he expects Netanyahu to be indicted in the submarine case. Such statements may be premature, as police are still in the midst of what is likely to be a long and very complicated investigation in both Israel and Germany. In the meantime, Netanyahu insists, as in other cases, that he’s done nothing wrong, that the entire affair (or affairs) are part of a media vendetta against him, and that the deal will be signed once the investigation is completed – and finds nothing.

In an unconnected development, the German Parliament decided in June to delay a $1.1B deal for the leasing of unmanned aerial vehicles from Israel Aerospace Industries pending a decision on an appeal by a rival defense contractor, General Dynamics, and as part of a budgetary review.

The Elovitch Case

Businessman Shaul Elovitch was placed under house arrest in early July as part of an investigation into dubious financial affairs involving Bezeq, the Israeli telecommunications company in which he is the principal shareholder. The investigation encompasses the relationship between Bezeq and two other companies under Elovitch’s control – the YES satellite TV provider and Spacecom, a provider of satellite communications infrastructure services. Securities Authority officials are examining Bezeq’s purchase of YES shares, the distortion of cash-flow figures and the possibility that the transaction’s main objective was to enhance the value of Elovitch’s personal equity in YES. Similarly, the authorities are looking into whether YES paid an inflated price for service it purchased from Spacecom, without examining other alternatives.

Elovitch is said to be a personal friend of Netanyahu’s. And while the prime minister is not currently a suspect in the Bezeq-Elovitch case, one of the suspects in it is Shlomo Filber, director-general of the Communications Ministry in which Netanyahu is the acting minister. Filber, a long-time Netanyahu confidant, was appointed to the post a few days after Netanyahu took over Communications in 2015; according to some press reports, he is suspected of providing Elovitch with sensitive ministry documents concerning the latter’s businesses.

Historic Visit

Prime Ministers Narendra Modi and Benjamin Netanyahu emphasized economic and security issues during the Indian leader’s historic visit to Israel in early July. Though Israeli leaders have visited India several times over the years, it was the first official visit to the Jewish state by a sitting Indian prime minister. The schedule of Modi’s three days in Israel, during which Netanyahu was almost constantly at his side, included participation in a joint Tel Aviv meeting of Indian and Israeli CEOs to discuss tightening commercial ties and a free trade pact aimed at increasing bilateral trade from its current annual $4B to $20B within five years (over the last 25 years, trade has risen 200-fold, from $200M.) There were also visits to high-tech and defense companies and meetings with high-level security officials including Yossi Cohen, Head of Israel’s Mossad overseas intelligence agency.

An emotional high point of the visit came when Modi visited Moshe Holtzberg, now 10, who survived the terror attack on the Chabad Jewish center in Mumbai, in which both his parents were among the killed. The Jewish center was one of multiple targets in the Mumbai attacks in which 171 people were killed and over 300 wounded.

Also during the visit, Israel Aerospace Industries, the government-owned defense contractor, reported the signing of cooperation agreements with India’s Dynamatic Technologies and Elcom for support of IAI-related unmanned aerial vehicle projects in India, as well as with two other Indian companies.

A few weeks before the Modi visit, IAI signed a $630M contract with India’s Bharat Electronics (BEL) to provide LRSAM systems (the naval version of the Barak surface-to-air missiles previously sold to Israel) for the Indian Navy. The jointly developed missile defense system will involve IAI and its Elta Systems, its subsidiary, Rafael Advanced Defense Systems, India’s Defense Research and Development Organization, and Indian companies including BEL and Larsen & Toubro, a private Indian company.

In addition, the Netanyahu government approved a NIS 280M plan to strengthen ties between the two countries, including a NIS 140M fund to encourage cooperation between Israeli and Indian technology companies, added government assistance for Israeli companies doing business in India, joint water and agriculture projects and production of a film made by the Indian film industry to encourage Indian tourism to Israel.

Forest Agreement

Kenya and Israel have agreed to cooperate on ways of growing trees in arid and semi-arid climates. According to a report in the Times of Israel online newspaper, in late June, the two countries signed an agreement to exchange information on arid-zone afforestation. For the past three years, officials of the Kenyan Forestry Service have been working with Keren Kayemet L’Yisrael/the Jewish National Fund on afforestation projects. An estimated 80% of the African country’s territory is classified as arid or semi-arid.

Cyber Attacks Foiled

The Shin Bet, Israel’s internal security service, has thwarted more than 2,000 cyber terror attacks since the beginning of 2016, agency head Nadav Argaman told a late-June conference in Tel Aviv. Argaman said that ground-breaking technology has enabled the Shin Bet and other government agencies to deal with attacks by terror groups and national entities as well as lone-wolf hackers inspired by incitement on social media. At the same time, Argaman warned potential attackers about the danger of targeting Israel. “Anyone who attacks us,” he said, “will get a total response”.

Meanwhile, a U.S. official has announced that Israel and the U.S. are setting up a bilateral working group to deal with cyber terror attacks.

Mexican Denial

Mexican President Enrique Pena Nieto has denied reports that his country spies against journalists and human rights activists using electronic equipment. Nieto’s denial came in the wake of a late-June report by a Toronto-based lab that Pegasus software made by Israel’s NSO Group was being used to monitor cellphones of persons critical of the Mexican government.

Innovation Leader

For the 7th consecutive year, the UN has ranked Israel first in innovation in the North Africa and Western Asia region. At the same time, Israel was ranked 17th among high-income countries, up four places from the 2016 rankings.

The Economy

OECD’s Positives

The OECD – Organization for Economic Cooperation and Development on June 7 issued a new laudatory report on the Israeli economy. The report anticipated that the economy, which grew by 4% last year, would grow 3.25% in 2017, and that increased spending on transport and housing would continue to serve as an engine for continued growth, which could further accelerate if tax reform steps recently announced by Finance Minister Moshe Kahlon are implemented.

Russian Cancellation

The Baran Group, an international engineering and construction firm headquartered in Beit Dagan just outside Tel Aviv, has lost an anticipated NIS 78M (about $20M) in anticipated profit with the cancellation of a NIS 780M project in Russia. The contract, signed by Baran’s ICM subsidiary, was for construction of a cardboard-production plant in central Russia, about 1,200 km east of Moscow.

Tamar Estimate Raised

Operators of Israel’s offshore Tamar natural gas field have raised their estimates of the potential yield by 13%. The updated figures, to be published in a prospectus, are 318 BCM of gas and 14.6 million barrels of condensate, up from the 2016 projection of 282 BCM and 13 million barrels respectively.

Start-Up Funding

157 Israeli startups raised $1.26B in the second quarter of 2017, the second-highest total in the last five years. An IVC report noted that the figure was topped, for the five-year period, only by the $1.7B raised by 194 start-ups in the second quarter of 2016.

Flights Added

Lufthansa, the German airline, is adding five more flights to and from its Tel Aviv destination. Beginning in October, the airline will offer 13 weekly flights to Munich and 23 to Frankfurt.

In another development, Wizz Air, the Hungarian budget airline, says it will open a new route between Israel and Timisoara, Romania, in October. With addition of the new route, Wizz Air will have flights to 18 destinations in 9 different countries between two Israeli airports, Ben-Gurion International near Tel Aviv and Uvda airport in southern Israel. Another budget airline, EasyJet, is adding direct flights between Tel Aviv and both Venice and Naples in Italy.

Tourism Up

Tourism to Israel in June rose by 28% percent over the previous June, to 303,000, according to Tourism Ministry figures. The influx brought the number of incoming tourists in the January-June period to 1.74 million, an all-time record. China accounted for the biggest increase, 76%, with tourism from Russia up 30% and from the U.S. by 20%.

Eilat Expansion

A plan to almost double the population of Eilat, Israel’s Red Sea resort city, has been submitted to the Southern Building and Planning Commission, It calls for increasing Eilat’s population, currently 60,000, to 100,000, adding over 14,000 new housing units and 5,400 hotel rooms, and upgrading the city’s tourism infrastructure.

Salaries Rising

The average salary for full-time work in Israel was increasing by an annualized 5% in March to about NIS 10,500, according to Central Bureau of Statistics figures reported by the Globes business daily.

Surprising CPI Drop

The Consumer Price Index declined by a surprising 0.7% in June, much larger than the anticipated drop of 0.2%. The decline brought inflation for the preceding 12 months to minus 0.2%.

FC Reserves Up

Israel’s foreign exchange reserves rose by $2.25B to a record $1.073B at the end of March, according to the Bank of Israel. The FC reserves now represent 32.9% of Gross Domestic Product.

Chennai Exit

Two Israeli companies, Electra and Property and Building, have announced that they are selling their 90% share of a residential real estate project in Chennai, India. Purchaser is the Indian company which owned the remaining 10% of the 2,200-unit project, paying about $45M.

Plea Bargain in IEC Case

Five former Israel Electric Corporation executives have been sentenced to jail terms ranging from 24 to 45 months, fined hundreds of thousands of shekels and had assets valued at millions of shekels in a plea bargain agreement for their illegal involvement with Siemens of Germany in 2001. The defendants pleaded guilty to charges including money laundering, bribery, fraud and breach of trust.

ICL may Sell Assets

Israel Chemicals, controlled by Idan Ofer’s Israel Corp., plans to consider selling assets that are not linked to its core fertilizer business. According to a report in Globes, Asher Grinbaum, ICL‘s new acting CEO, plans to cut costs due to lower prices of potash on world markets. ICL recently sold its 50% stake in IDE Technologies, the Israeli specialist in water desalination, to a group of investors headed by its general manager Avshalom Felber.

New Attaché in Washington

Eran Nitzan has been named Israel’s new economic attaché in Washington. Nitzan previously served as a deputy budget director in the Finance Ministry.

Delivery by Drone

Israel’s Terascan has won a tender to provide unmanned aerial vehicles (UAVs, or drones) to deliver package. Big Shopping Centers, also an Israeli firm, granted Terascan NIS 100,000 to adapt UAV currently used for mapping and surveying to the retail task. Terascan’s UAV has ix engines, is 2 meters in diameter and can carry payloads of up to 8 kg. No date for delivery of the first UAV was announced.

Infrastructure Plan

The Finance, Infrastructure and Transport ministries are establishing a committee to plan major upgrades in Israel’s infrastructure, particularly in rail links and mass transportation. According to various published reports, the gap between investment in Israel’s infrastructure and that of advanced Western countries ranges between NIS 200B and NIS 600B.

India Plant

The Israeli branch of Phibro Animal Health Corp., an international veterinary supplies provider headquartered in Teaneck, New Jersey, has contracted with India’s Zydus Cadila to establish a plant in India manufacturing Phibro products. Globes estimates the deal’s value at $150M. Phibro has two manufacturing facilities in Israel, at Neot Hovav in the Negev and Petah Tikva. The Israeli business, which covers countries in Eastern Europe, Africa and Turkey, accounts for about $150M of Phibro’s annual turnover worldwide.

Housing Move

The government’s socio-economic cabinet has approved Finance Minister Moshe Kahlon’s allocation of NIS 1B to purchase homes for public housing. The move is designed to reduce waiting time for families entitled to public housing. The move comes in the wake of a continuing housing shortage, home prices that have risen sharply over the long term, and a Justice Ministry report describing Israel’s housing situation as “dismal, to the point where we cannot describe all the problems.”

Finance & Investment

New Chinese Venture Fund

A new venture fund in China plans first-stage investment of $100M in Israel, according to a report in Globes. Called MizMaa (the name is a shortened combination of the Hebrew words for East and West), the fund has been in operation for a year. According to the report, MizMaa’s current main investors are three wealthy Chinese families, headed by the Chens. The fund, which has already invested in several Israeli companies including Ameron, Coronet and the Twiggle shopping platform, plans to raise another $150M in the coming year.

UK Ed-Tech Fund

British film producer-director Lord David Putnam, whose credits include “Chariots of Fire” and “Midnight Express,” is behind a new British fund designed to invest in Israeli educational technology firms. Investors include the Arie Fund of the UK, which already invests in Israeli tech, the Israeli philanthropy Beracha Foundation, Edcorp of India, Japanese and Chinese investors, and the Center for Educational Technology. The British Educational Suppliers Association and the technology arm of the British Embassy in Israel are also taking part in the venture.

Technion Fund

The Haifa Technion Israel Institute of Technology’s new $200M venture capital fund will invest in science and technology companies related to the institution and its alumni.

Investigation halts Bezeq Bond issue

A police investigation into possible securities violations by controlling shareholder Shaul Elovitch and his Eurocom group have delayed a scheduled restructuring, including a bond issue, of Bezeq, Israel’s largest telecom group.

Qoros gets some Financial Help

Qoros, the struggling Chinese automaker partly controlled by Israeli businessman Idan Ofer, has received a $941M investment from an unnamed Chinese source. After the investment, Ofer’s Kenon holding company and Chery, the Chinese automaker, will each hold about 25% of Qoros.

Mossad as an Investor

The Mossad, Israel’s vaunted international intelligence agency, is going into business. According to a report in Haaretz Hebrew daily, the Mossad is putting the finishing touches on a fund to invest in local Israeli start-ups. There are, however, limit’s to the spy agency’s capitalism: Instead of getting shares and collecting dividends or waiting for a juicy exit, the Mossad will get rights to technology produced by the start-ups, for its own use.

Japanese Investment

Cybereason, founded by three graduates of the IDF Intelligence Corps 8200 technology unit, has raised $100M from Japan’s Softbank. The system developed by Cybereason, which is based in Boston and Tel Aviv, reduces the time enterprises require to locate malicious activity. The company says its automated software has protected dozens of Fortune 100 firms from cyber-attack.

Aussie IPO

Elsignt, a provider of encrypted data-transfer solutions based in Petah Tikva east of Tel Aviv, has raised $5M on the Australian Stock Exchange. According to the Financial Review website, Elsight joins several other Israeli firms listing in Australia, including Votiro, Cybersec and CyberGym. The website quoted Nir Gabay, Elsight’s CEO, as saying his firm had opted for the Australian listing because the financial requirements were lower than those of NASDAQ, or even the Hong Kong exchange.

A Very Big Houzz

Houzz, an interior design home remodeling service, has raised $400M based on a company valuation of a whopping $4.3B. The company, based in Palo Alto, California and Tel Aviv, lists more than 1.5 million home professionals and 40 million users on its website. It was founded by Adi Tatarko and Alon Cohen in 2009, who reportedly met on a bus when both were touring in Thailand and now are married with three children. The recent financing round was led by Iconiq Capital of San Francisco.

Tower Soars

Shares of Tower Semiconductors, which trades as Tower Jazz, rose sharply in mid-July, reaching a market cap of NIS 9.5B (over $2.6B) on the Tel Aviv Stock Exchange, almost double what it was a year earlier. The company, which is based in Migdal Haemek near Haifa, specializes in the manufacture of analog chips.

Mergers & Acquisitions

Neuroderm Bought for $1.1 Billion

Mitsubishi Tanabe Pharma of Japan has purchased NeuroDerm, an Israeli pharmaceuticals company based in Rehovot, southeast of Tel Aviv, for $1.1B. The cash transaction is the largest-ever sale of an Israeli healthcare company. NeuroDerm develops drug-device combinations for disorders of the nervous system. The price represents a 17% premium over NeuroDerm’s closing share price on NASDAQ on Friday, July 21, the last day before the sale was announced.


Symantech, the multinational cyber security firm, has purchased Fireglass, an Israeli company specializing in isolation technology to prevent ransomwear, phishing and malware threats in real time. No financial details were announced, but Israeli reports put the purchase price at about $250M. Fireglass was founded three years ago by Guy Guzner, formerly of Check Point, the Israeli firewall specialist.

A few days after the Fireglass purchase, Symantech said it had entered into an agreement to purchase another Israeli company, Skycure, a specialist in defense against mobile threats. Again, the purchase price was not disclosed.


SeatGeek, a New York-based ticketing platform firm, has acquired Israeli ticketing software producer TopTix for a reported $56M. TopTix’s SRO ticketing system currently serves 500 clients in 16 countries, processing 80 million tickets annually; its clients include the Royal Dutch Football Association, many English football clubs and the Ravinia Festival, the U.S.’s oldest outdoor music festival, held in the state of Illinois.


Microsoft has purchased Cloudyn, a specialist in cloud services analytics and optimization, for a reported $50-$70M. Located in Rosh Ha’ayin northeast of Tel Aviv, Cloudyn’s previous investors included RDC, which is a joint venture of Elron and Rafael Advanced Defense Technologies, Carmel Ventures, Infosys, Titanium and Viola Credit.


Fortissimo Capital, an Israel private equity fund with offices in the high-tech belt in Rosh Ha’ayin, has signed an agreement to acquire Tuttnauer for $100M. Tuttnauer is a global leader in medical sterilization systems for laboratories, medical clinics and hospitals with an Israeli base in Beit Shemesh, about halfway between Jerusalem and Tel Aviv. Fortissimo currently has about $1B under management in its four funds.


Checkmarx, an Israeli application-security testing developer based in Ramat Gan, has acquired Codebashing of the UK. The British start-up specializes in training in application security. Financial details were not announced, but media reports put the sale price in the $5-10M range.

IDE Stake Sold

Israel Chemicals has sold its 50% share of desalination firm IDE Technologies for $178M in cash. Buyers are Israel’s Clal Insurance, the Teachers and Kindergarten Teachers Advanced Training Fund, and Avshalom Felber, IDE’s CEO. The Delek Group, which holds the other 50% of IDE equity, is also interested in selling, but its controlling shareholder, Yitzhak Tshuva, believes current company valuation is too low.

Our Crowd Incubator

Our Crowd, the Jerusalem-based crowdfunding firm headed by venture capitalist Jonathan Medved, is opening a new incubator in Jerusalem’s JVP Media Quarter. Co-sponsors of the incubator, which will specialize in early-stage funding, are Reliance Industries of India, Motorola Solutions and Yissum, the Hebrew University of Jerusalem‘s technology transfer company.

Frutarom Completes Acquisition

Frutarom, the Israeli producer of flavorings and specialty fine ingredients, now owns 100% of Spain’s Nutrafur. In June, Frutarom paid about $2.5M for 21% of the Spanish company, maker of antioxidant plant extracts; the Israeli company previously acquired 79% of Nutrafur in September 2015.


Honeywell, a multinational provider of software solutions for a number of industries, has acquired Israeli firm Nextnine for a reported $35M. Nextnine, which is based in Petah Tikva and New York, specializes in software protection against cyber-attacks, has clients in the fossil fuel, chemical, manufacturing and mining sectors.


JFrog, an Israeli DevOps developer based in Netanya, has acquired Cloudmunch, a U.S. intelligence platform firm. Cloudmunch is JFrog’s third acquisition in the last nine months, after acquisitions of Dimon of Napa, Califormia, and Conan, of Sunnyvale, California.. Financial details were not disclosed. DevOps is a software development process emphasizing cooperation between professionals in the product management, software development and operations fields.

Equity Funds Acquire S.AL.

Kedman Capital and Sky Fund, two Israeli equity funds, have acquired a 70% stake in the S.AL. group at a company value of NIS 280M. S.AL. represents overseas manufacturers of products used in construction.


Saisanket of India has signed an agreement to purchase Shtula Metal G, a developer and manufacturer of metal parts and devices, for NIS 18M. The Israeli company, based in the village of Shtule in the Western Galilee, has been in financial difficulty for the past two years.

Chinese Acquire PCB Business

Camtek, based in Migdal Haemek in northern Israel, has sold its PCB (printed circuit board) business to Shanghai-based Principle Capital, a private equity fund, for $35M. Camtek officials said the company will now focus on its semiconductor inspection and metrology business.

Competition for Chemagis

The Apax and SK Capital funds are engaged in competitive bidding to acquire Chemagis from Perrigo, its current owners. Chemagis, with offices in the Tel Aviv area and a plant in the Negev, produces active pharmaceutical ingredients for branded and generic drugs.

Science & High Technology

Next Teva Blockbuster?

Teva Pharmaceutical Industries acting CEO Yitzhak Peterburg expects the Petah Tikva and Jerusalem-based firm’s new migraine treatment to be a blockbuster drug in the making. “Without citing figures,” he said, “Teva definitely has a multibillion-dollar drug.” The drug, Fremanezumab, recently succeeded in two separate clinical trials for acute and chronic migraine; Teva says it will submit the drug for FDA approval sometime this year, and anticipates a launch in the second half of 2018.

Teva is involved in disputes over whether patent protection is still valid for Copaxone, its first blockbuster drug. At the same time, Teva has launched generic versions of Pataday, an ophthalmic solution for treating itching of allergic conjunctivitis, and Zetia, a cholesterol-lowering agent.

Double Dose Trial Successful

Sol-Gel has reported successful Phase II trials for Twin, its unique combination of two known acne drugs in a unique molecular wrapping, which makes it easier for pharmaceuticals to penetrate human skin. The molecule has already been used in a protective cream product which is on the market. Based in Nes Tziona southeast of Tel Aviv, Sol-Gel was acquired about three years ago for $27M by businessman Mori Arkin’s Arkin Holdings.

Patent Leaders

Three Israeli universities are on the list of the 100 universities registering the most U.S. Patent Office patents last year. They are Tel Aviv University, through its Ramot technology transfer company, in 43rd place; the Haifa Technion, which was 53rd, and the Hebrew University of Jerusalem via Yissum, its tech-transfer arm, in 87th place. Most institutions on the list are from the U.S. The University of California was first, followed by MIT and Stanford.

Solar “Tree” in France

An “eTree” with “leaves” that are large solar panels converting the sun’s light into electricity has been unveiled in the town of Nevers in central France. Inspired by the acacia tree native to the Israeli desert, the solar tree allows passersby to charge their mobile phones and surf the Internet (it also powers street lighting). The installation, based on technology developed by Sologic, based in Binyamina about halfway between Tel Aviv and Haifa, is the first in Europe.

Autonomous Car Tests

Automaker General Motors and Israel’s Mobileye have received separate permits to test autonomous cars on Israel’s roads, according to a report in Globes. GM’s prototype car, based on the electricity-powered Chevorlet Bolt, was unveiled in early June at a conference for veterans of the IDF Intelligence Corps’ 8200 technology unit.

Future Tech Lab

Kaspersky, the Russian multinational cybersecurity and anti-virus developer, has opened a new Future Tech laboratory in Jerusalem. The lab will concentrate on new technologies including embedded systems, automotive systems and the Internet of Things.

Quantum Communications

The Hebrew University’s Quantum Information Science Center has won a government tender for construction of a national demonstrator for quantum communications technology. The project is aimed at development of an Israeli system that protects data and increases security of national infrastructure.

ICU Safety

Art Medical, based in Netanya north of Tel Aviv and Palo Alto, California, has raised $20M in a second fundraising round led by Advanced Medical Technologies of Louisville, Kentucky. The Israeli start-up specializes in “smart tube” technology that reduces the mortality and risk of collateral infection, sepsis or other complications in intensive care unit patients who have undergone otherwise successful medical procedures.

Bacterial Breakthrough?

Researchers at the Hebrew University of Jerusalem say that they may have found a way of combating the growing threat of antibiotic-resistant bacteria. The scientists say they have found a simple method for measuring a bacteria’s tolerance, or the time it takes to kill a bacterial population – knowledge that could enable more effective countermeasures against bacterial strains that are on their path to becoming resistant.

Indian Cyber Contract

Haifa-based start-up MindoLife has won a $20M contract to supply its Cyber-Things products to SAR for integration into the Indian company’s water bars and home-energy systems over the next three years. The two firms have entered a long-term strategic-cooperation agreement to install MindoLife technology in SAR’s full line of products. The company, founded three years ago at the Hybrid accelerator in the northern Israeli city of Nazareth, currently has only seven employees. Its founders are two Israeli Jews, Yoav Rosenthal and Noam Levi, and two Israeli Arabs, Ram Younes and Rami Kahawaly.

Evogene’s Dupont Deal

Evogene, headquartered in Rehovot, has teamed with DuPont Pioneer, to apply its computational biology analysis technology to develop seeds that will improve corn yields.

Aerospace & Defense

F-35 Order Completed

The Defense Ministry recently confirmed its order for an additional 17 F-35 warplanes from the U.S. Defense Department, completing the acquisition first announced in November 2016. Israel previously purchased 33 of the advanced aircraft, five of which are already in Israel and in operation out of the Nevatim base in the southern part of the country. Two more of the $100M planes, called Adir by the IAF, are due in Israel in August, with another two in September and nine during the course of 2018.

Export Rules Eased

Israeli defense contractors are likely to find overseas sales less difficult in the wake of new regulations signed by Economy and Industry Minister Eli Cohen. The new rules, when they come into effect, will allow Israeli defense firms to make joint bids in overseas procurement tenders, rather than competing against each other. Current rules require a special permit from the Defense Ministry and the Antitrust Authority for companies seeking to submit joint bids abroad.

Elbit’s Eye in the Sky

Elbit Systems, Israel’s largest private defense contractor, has unveiled a revolutionary new airborne system that allows security forces to monitor activity in up to 10 different locations over a 80 km. radius. SkEy WAPS, mounted on Elbit’s Hermes 900 unmanned aerial vehicle, is capable of staying aloft for 36 hours, providing continuous tracking in all weather conditions. Billed as “a game changer in the war against terrorism,” Eye in the Sky is designed to deal with events like last year’s Paris terror attack, which involved multiple sites over a wide area. Globes reports that the system has already been sold to several countries, including Brazil. Elbit unveiled it for public viewing at June’s Le Bourget air and defense show in Paris.

Arrow’s Alaskan Trial

Israel plans to test its Arrow 3 missile defense system, which is capable of intercepting incoming missiles or even satellites at high altitudes in Alaska, according to a report in Globes. Advanced ballistic missiles similar to those developed by Iran will be the targets of the test, which is being held in thinly-populated Alaska due to the diminished risk of damage from falling debris. Cost of the test, which reportedly is being shared by the U.S., is estimated at $80M.

Contract for Base

Electra Construction, a subsidiary of Israel’s Electra Ltd., has been awarded a NIS 330M (about $90M) Defense Ministry contract to build an IDF training base.

Elbit’s F-35 Display

Lockheed Martin of the U.S., lead contractor on the U.S. F-35 stealth fighter project, has selected Israel’s Elbit Systems to develop a new cockpit display system for the state-of-the-art warplane. The panoramic display will center on a contact screen comprised of moving maps and other real-time flight data. Value of the deal was not announced, but Globes said it had established the Israeli defense contractor as a world leader in the field of advanced aircraft display.

Emergency System

Ashot Ashkelon Industries, a subsidiary of Israel Military Industries, has unveiled a new hybrid propulsion system designed to deal with emergency engine failure on light aircraft. The system, called HYSKY 60, uses an electric engine to provide up to 15 minutes of power after a plane’s main engine stops working. HYSKY 60 was unveiled at the Paris air show in June.

Other Israeli exhibitors at the Paris show included Israel Aerospace Industries, Rafael Advanced Defense Systems, Aeronautics, Elbit Systems, Beit Shemesh Engines, Controp and Blue Bird Aero Systems. Rafael’s exhibit included DroneDome, a laser-based system for intercepting and downing unmanned aerial vehicles.

Lora Test

Tests of IAI’s LORA (Long Range Artillery) weapons system have been completed, with a trial at sea. The LORA system consists of a long-range tactical surface-to-surface missile, weighting 600 kg., which can target with a precision of 10 meters at a range of up to 400 km. IAI showed the system at the recent Paris air show.

More Dreamliners

El Al recently finalized an order for an additional three Boeing 787-8 and 787-9 Dreamliners. The Israeli airline, which first ordered 787s in 2015, now has six unfilled orders for the aircraft, in addition to agreements to lease an additional seven. El Al’s first Dreamliner was due to arrive in August.

African “Music” Client

Elbit Systems says that it will equip an African-based client’s VIP Gulfstream 650 executive aircraft with its MUSIC directed infrared countermeasure system to protect fixed wing and rotary-powered aircraft against man-portable air defense systems (MANPADS).

IAI Gets Computerization Contract

IAI has been named chief contractor for computerization by the Defence Ministry’s Procurement and Production Directorate, a project with an estimated value of NIS 600M. TSG, an IAI subsidiary which formerly was the military division of Ness Technologies, and Ledos, a spin-off of U.S. defense contractor Lockheed Martin, are subcontractors on the project. Other bidders on the project included Elbit, Rafael Advanced Defense Technologies, Bynet group, Bezeq International, ECI Telecom, IBM and EMC.

Airline Merger

El Al, has signed an agreement to absorb Israir, a smaller Israeli airline. Under terms of the agreement, which still requires approval from Israel’s Antitrust Authority, Israir’s owner IBD Development Corp. will receive $45M in cash and 25% of the shares of El Al charter subsidiary Sun d’Or, into which Israir will be absorbed. Israir’s current fleet of aircraft will be sold and the airline will lease planes to continue its operations.

IAI Cyber Investment

IAI has announced that it is investing in two cybersecurity start-ups – Dutch-Israeli Impedio, which detects and stops attacks on governments and enterprises, and Cytrox, a Hungarian firm specializing in cyber intelligence. Financial details were not announced.

Meanwhile, IAI’s Bedek division is setting up Israel’s first aviation innovation laboratory, in cooperation with the Israel Innovation Authority, formerly known as the Office of the Chief Scientist.

According to a report in Haaretz, Harel Locker, who served as director-general of the Prime Minister’s Office, is Defense Minister Avigdor Lieberman’s latest choice for IAI chairman. The post has been vacant for more than a year, since the resignation of previous chairman Rafi Maor, and the focus of disputes involving Government Corporations Authority head Uri Yogev, Lieberman, Finance Minister Moshe Kahlon and Social Welfare Minister Haim Katz. Further complicating matters is the current police investigation into allegations of corruption involving IAI and members of its workers committee.

Rechargeable Power

The IDF is installing rechargeable batteries in its portable radios and other communications systems, saving millions of shekels and lowering potential pollution. The army has acquired 70,000 of the batteries, at a cost of $8.5M, from Electric Fuel, a subsidiary of Arotech Corp. located in the city of Sderot, in southern Israel near the Gaza Strip border.

Poland’s “Israeli” Patriots

Poland’s agreement to purchase Patriot air-defense systems from a U.S. defense contractor has a substantial Israeli element: the system will use interceptor missiles developed by Rafael Advanced Defense Systems for Israel’s David Sling. Total value of the deal has been estimated at $8B, about $1B of which is earmarked for Rafael for the interceptor missiles. According to press reports, Poland insisted that the system incorporate the Israeli missiles, which at about $450,000 each are one-tenth the cost of the original Patriot missiles, and for its superior performance. David’s Sling is marketed outside Israel as Skyceptor.

Robot Carriers

The IDF will begin experimental deployment of robots to carry field equipment for infantry units. According to a report in Haaretz, the experiment will begin in September. The robots, called infantry robotic porters, are made in Israel and can carry up to 500 kilograms of water, food, ammunition and other supplies, and can evacuate wounded soldiers from a war zone.

According to the Haaretz report, the IDF had used llamas to carry equipment, including during the Second Lebanon War.

IAI’s Topgun Deployed

TopGun, Israel Aerospace Industries’ course-correction artillery fuze, has been acquired by the Israel Defense Forces. According to reports on the Israel Defense website and in Jane‘s, the IDF has ordered 5,000 units of the system, expected to be fully operational by 2019, TopGun is a guidance kit attached to standard 155 mm artillery shells, using GPS to adjust the trajectory in flight. IAI says it is accurate to within 10 meters at a range of up to 40 km.

New Spike

Rafael Advanced Defense Systems recently introduced Spike LR II, a 5th-generation version of its advanced multipurpose missile. The advanced Spike, weighing 12.7 kg, can be launched from any Spike launcher. Rafael says a new warhead configuration enhances armor penetration capability by more than 30% and has enhanced capabilities for firing against state-of-the-art low-profile targets. It was introduced in June, at the Paris Air Show.

Deadly Loiterer

One of the Israeli systems introduced at the recent Le Bourget Air Show in Paris is SkyStriker, Elbit Systems‘ remotely-operated electro-optical precise guided loitering munition designed to seek, locate and engage targets at the tactical level. According to the manufacturer, SkyStriker’s electronic propulsion system has a low acoustic signature, can fly dozens of kilometers in minutes and loiter virtually undetected near its target for up to two hours. SkyStriker can carry payloads of up to 10 kg.

Another development unveiled at Le Bourget was Orbiter 4, a new relatively small multi-mission-capable UAV made by Aeronautics of Yavne. Orbiter 4’s capabilities include maximum endurance of more than 24 hours, capability to carry and operate two different payloads simultaneously, 50 kg take-off weight, altitudes of up to 18,000 feet and 250-km line-of-sight range.

IAI’s Mexican Plant

IAI‘s Bedek Aviation Group has opened an aircraft conversion facility for reconfiguring Boeing 767-300 airliners into freighters. Mexicana MRO Services is subcontractor on the contract, for which dozens of Mexicana employees have been trained by IAI.

Body Cameras for Cops

The Israel Police has acquired 8,000 body cameras for use by patrol officers. The purchase follows a three-month pilot project in which complaints at participating police stations declined by 35%.

Training System Order

The IAF has ordered EHUD ACMI Air Combat Maneuvering Instrumentation systems from IAI. The systems will be used to train pilots in simulated air com facing the IAF’s Lavi trainers, which are already fitted with EHUD systems. The system has air-to-air, air-to-ground, and electronic warfare capabilities.

Singapore Opts for Spike

Singapore’s army has purchased Spike SR short-range anti-armor rocket systems, replacing the Saab Bofors Dynamics 84mm Carl Gustaf M2 with its infantry and guards forces. Value of the deal, first reported by Jane‘s, was not announced. The weapons were due to go into service in June.

IMI Privatization to Resume

A government committee has approved resumption of the Israel Military Industries privatization process, according to a report in Haaretz. The process, which has been subject to numerous delays over the past two years, was temporary halted earlier this year when it was discovered that Prometheus, one of two firms retained by the Government Corporations Authority to conduct a valuation of the state-owned defense contractor, had worked with Elbit, the sole bidder for IMI.

Cyber Pact with U.S.

The U.S. and Israel are establishing a new working group to work on cyber issues and encourage international cooperation on them, an adviser to President Donald Trump told a Tel Aviv conference in late June. Tim Bossert said the partnership is aimed at “stopping adversaries in networks and identifying ways to hold ‘bad actors’ responsible.” At the same conference, Prime Minister Benjamin Netanyahu said that Israel attracts about 20% of total world investment in cyber security.

Teaming With Honeywell

IAI and Honeywell Aerospace have agreed to team up in the development of an advanced anti-jamming GPS navigation. The new technology will incorporate IAI’s ADA system into the U.S. defense contractor’s Inertial Navigation System to assure an uninterrupted flow of satellite data for navigation, command and control and electronic warfare systems.

Thai Planes, Elta Radar

The government of Thailand has confirmed the order of 8 Kai T-50 Golden Eagle advanced training aircraft from South Korea. The aircraft are to be fitted with Elta‘s M-2032 fire-control radar.

Bradleys Getting Iron Fist

Iron Fist, an active protection systems for armored vehicles developed by IMI Systems (formerly Israel Military Industries) and U.S. contractor General Dynamics, has been chosen as the interim system for U.S. Army Bradley fighting vehicles. According to Defense News, General Dynamics claims that the current version of Iron Fist is not the same system as the one that lost out to Rafael‘s Trophy in an Israeli competition a decade ago. Trophy, known in Hebrew as Windbreaker, has been fitted on Israeli armored vehicles, including Merkava tanks and armored personnel carriers.

The report confirmed statements made in June by U.S. Army Chief of Staff Gen. Mark Milley, who told Congress that the U.S. would purchase advanced active armored vehicle defense systems from Israel. Milley noted that only two countries currently produce complete systems, Israel and Russia, saying that “one of them is friendly, the other not so friendly.”

Aeronautics IPO

Aeronautics, Israel’s fifth largest defense contractor, raised NIS 460M in a mid-June initial public offering on the Tel Aviv Stock Exchange, based on a company valuation of about NIS 1B. The company, founded in 1997, manufactures unmanned aerial vehicles, electro-optical systems, sensor and communications systems, and observation balloons.

IDF Opts for Hilux

The IDF is acquiring Toyota Hilux vehicles for light armored vehicles, to replace the Land Rover Defender currently in service. Though it is not clear exactly what Hilux model will be purchased, a prototype has been undergoing tests for several months.

Joint Naval Exercise

Units of the Israeli, U.S. and French navies concluded a two-week joint exercise in late July. The operation, code-named Noble Melinda, was the first maneuver of its kind to involve the French Navy. The Israel Navy’s salvage and underwater works unit joined the French and Americans in simulated mine detection, demolition and dealing with underwater terror attacks.