News Analysis – December 2019

General News Summary

The Third Time Round

After two rounds of inconclusive elections, Israel goes to the polls again on March 2 to elect the 120 members of the Knesset, its unicameral legislature. And there are some indications that the final count will produce the basis of a government coalition this time round.

The tally of parliamentary seats after the first two of this year’s elections, in April and September, produced strikingly similar results, with only some small variations: A right-religious bloc supporting Netanyahu and a centrist-left opposition group backing former IDF chief of staff Benny Gantz, neither with enough votes on its own to produce a 61-seat majority, a dozen members of the largely Arab United List, which neither side is anxious to have as a partner, and the pivotal eight seats of Avigdor Leiberman’s Yisrael Beitenu. Lieberman, who’s held the Defense and Foreign Affairs portfolios in separate past Netanyahu governments, now is advocating a national unity coalition between the two large parties, minus the religious and leftist parties on the extremes of each bloc.

Elections come after more than two months of unsuccessful negotiations, in which Netanyahu and Gantz successively tried their hands at coalition-building. Proposals for a rotating prime ministership couldn’t overcome each side’s insistence on who should come first.

Some new factors have come into play now, although it’s far from clear that another vote will produce a significantly different result. Netanyahu’s leadership of his own party will be tested, for the first time in a decade or more, in leadership primaries scheduled for December 26. The only other candidate so far is Gideon Sa’ar, a former minister, who garnered the support of a few Likud politicians, but Netanyahu is a heavy favorite to win an overwhelming majority.

A second factor is the indictments. Erosion of support among Netanyahu’s backers has been limited so far, but it is likely to increase when criminal charges become official.

A third factor, public frustration over the lack of a functioning government and the lack of action in dealing with emerging economic and security challenges, may be the most decisive. Public opinion polls taken in the week after the call of elections show some shifting of support toward Gantz and his Blue White party, but will he be able to form a coalition? The answer will come in just over two months.

Bennett to Defense

Prime Minister Benjamin Netanyahu appointed Naftali Bennett, a leader of the New Right party and a previous minister of education, as defense minister in his interim government in November. Netanyahu had been serving as defense minister since Avigdor Lieberman resigned late in 2018. Likud sources call the appointment a tactical political move, to guarantee right-wing solidarity during the ongoing coalition negotiations.

Submarine Case Indictments

The State Attorney’s Office said in early December that it planned to indict a former top aide to Prime Minister Benjamin Netanyahu, Netanyahu’s personal lawyer, a former commander of the Israel Navy and several other figures in an affair centering on questionable circumstances surrounding the purchase of five submarines from Germany’s ThyssenKrupp shipyards. Charges, pending a hearing, include bribery, money laundering and tax offenses.

The officials in question: Michael Ganor, ThyssenKrupp’s representative in Israel; David Shimron, Netanyahu’s cousin and attorney; Eliezer Marom, the former Navy commander; David Sharan, former head of the PM’s Bureau; former government minister Eliezer Zandberg; and several others.

Iranian Base “Nearly Done”

Satellite photos indicate that construction of the Iranian Imam Ali base near the Albukamal crossing on the Iraqi-Syrian border is nearly complete, according to a recent report by ImageSat International. ImageSat says that Iran will soon be able to transfer advanced rockets and other munitions to warehouses at the new base; according to foreign press reports, Israeli attacks on Iranian installations inside Syria include several aerial sorties in the Albukamal sector.

450 Attacks Thwarted

Shin Bet internal security service head Nadav Argaman said in November that his service had prevented more than 450 terror attacks during the previous year, allowing Israeli citizens to have “full and comfortable lives.” Argaman credited advanced technologies deployed by his forces, as well as synergies with similar agencies around the world.

Gas not Answer, Scientists Say

Over 100 Israeli scientists and energy experts, including Nobel Prize laureates Dan Schechtman and Robert Aumann, have urged National Infrastructures Minister Yuval Steinitz to halt construction of power stations fueled by natural gas and switch to renewable energy sources. In a letter initiated by Prof. Alon Tal, one of Israel’s top environmentalists, the academics say that burning gas creates significant danger from emissions, and that the cost of generating electricity from renewable sources will catch up with that of fossil fuel generation within two decades.

Direct to Oz

El Al will inaugurate direct flights to Australia in April, the Israeli airline announced in mid-December. The weekly schedule, connecting Tel Aviv’s Ben-Gurion International airport and Melbourne, initially will consist of three flights in each direction.

…and Casablanca

El Al is also considering flights to Casablanca, according to Israel Today. The paper says that Gonen Usishkin, the Israeli airline’s CEO, recently discussed opening a Tel Aviv-Morocco route with representatives of Royal Air Maroc at a tourism conference in the North African country. Morocco is a popular destination for Israelis, particularly “heritage tours” for Israelis of Moroccan origin, who currently use connecting flights through Europe.

Eilat Bans Beach Plastic

Eilat, Israel’s southern Red Sea resort city, has become the first Israeli municipality to ban the use of disposable plastic products, including plastic bags, on its beaches. Violators can be fined up to NIS 730 under the municipal ordinance passed in mid-December.

Train Arriving – Finally

The express direct rail link between Tel Aviv and Jerusalem, in the works since 2001, was due to begin operations on December 21. For the last year, the long-awaited train has operated on a partial route, only as far as Ben-Gurion International Airport. Israel Railways says the train will take slightly more than half an hour to complete the 57-km route between Tel Aviv’s Hagana Station and the Yitzhak Navon Station in Jerusalem.

The Economy

Sharp Growth

Israel’s economy grew by an unexpectedly high 4.1% in the third quarter of 2019, according to a mid-November estimate released by the Central Bureau of Statistics. The estimate contrasts with 0.7% growth in the second quarter and is attributed mostly to private spending for the Jewish holidays and larger gross investment in inventory. According to Globes, third quarter growth would have been even higher were it not for adverse effects from the U.S. trade war, which caused an estimated 3.6% decline in the export of goods and services.

OECD Predicts Slowing

Israel is entering a period of slow growth, according to predictions by OECD economists. OECD recently downgraded its growth prediction to 2.9% in 2020 and 2021, down from their projection of 3.3% for 2020 made a year ago. Over the past 25 years, Israel’s average growth was 3.7%, including 3.8% in the decade since 2010.

And Moody’s is Positive

Moody’s, the international credit rating agency, issued a very positive assessment of the Israeli economy in late November, reaffirming the country’s A1 sovereign debt rating with a positive outlook. The report cites improvement in Israel’s debt-to-GDP ratio in the past decade, saying Israel “is one of only a handful of advanced countries that has a lower debt-to-GDP ratio now than before the global financial crisis.” It says that Israel’s economic growth has outpaced most other advanced industrial countries over the past decade, driven by a strongly competitive high-tech export sector and a diversified economic base that now includes energy exports.

Credit Suisse also issued a generally positive assessment, though it foresaw a decline in domestic demand and a slowing of growth to 3%.

Deficit Effort Falters

Finance Ministry efforts to reduce the budget deficit fell short of their objectives, with the shortfall dipping only slightly from September’s 3.8% of Gross Domestic Product to 3.7% in October. The large deficit is due to two factors: increased spending by government ministries other than defense by 8%, compared to the budgeted projection of around 6.5%, and an increase of only 2.3% in funds collected from taxes.

And Average Wage Rises

Average gross monthly wages for Israeli workers was NIS 10,856 in September, the Central Bureau of Statistics reported, up 4.6% from September 2018. After adjustment for seasonal effects such as the Jewish holidays, monthly salaries climbed at an annualized rate of 2.4% in July-September 2019. Average gross monthly salary for foreign workers was NIS 6,603.

Gender Gap

The difference between wages of Israeli men and women widened in 2018, according to a Central Bureau of Statistics report published in December. Israeli men’s average monthly wage was NIS 12,559 (about $3,600) compared to women’s NIS 8,546 (about $2,500). Part of the difference was attributed to the number of hours each gender work per week: men 44.5 hours, women 39.5 hours.

Tourism Record

About 4.2 million tourists entered Israel in the first 11 months of 2019, the Central Bureau of Statistics reported. The CBS predicted that total tourism for all of 2019 would reach a record 4.6 million, up 11% from the previous record, which was set in 2018.

Foodie Rankings

Tel Aviv has earned top ratings on two rankings of food at tourist destinations. The city was ninth in the BBC’s ranking in a list headed by Galway, Ireland: Lyon, France and Los Cabos, Mexico, and ninth as well in the Happy Cow websites list of vegan culinary venues (topped, in order, by London, New York, Berlin, Los Angeles and Toronto).

North Sea Acquisition

Israel’s Delek Group, controlled by billionaire Yitzhak Tshuva, has completed its $1.75B acquisition of North Sea oil fields from Chevron. The company says its Ithaca subsidiary has signed a distribution agreement with BP, and that it plans to increase production to 80,000 barrels a day. Delek recently sold its 32.5% share of Israel’s Phoenix insurance company for $450M.

Aphrodite Blocked

The Energy Ministry has informed Delek Drilling, Noble Energy and Shell that they cannot develop Cyprus’s offshore Aphrodite natural gas field until a demarcation dispute with the adjacent Israeli Yishai field is settled. According to a report in Globes, the ministry took the move after Israeli businessman Benny Steinmetz complained that the Israeli government was not doing enough to protect the rights of Steinmetz and his partners, who have rights to Ishay field.

Finance & Investment

Sister Power

Randi Zuckerberg, sister of Facebook founder Mark Zuckerberg, has joined the new Sababa Ventures. Sababa is seeking to raise $35M and become a bridge between Israeli innovators and U.S. media, entertainment, commerce and sports markets.

Bank Decision Reversed

The Jerusalem Competition Tribunal has overruled a decision that would have blocked the proposed merger between the Mizrahi Tefahot and Union banks. The merger between Mizrahi Tefahot, Israel’s fourth largest banking group, and the smaller Union was blocked in May 2018. Mizrahi Tefahot argued that acquiring Union would benefit consumers by helping it compete against Bank Hapoalim and Bank Leumi, Israel’s two biggest banks.

Discount Profits

Israel Discount Bank finished the third quarter, its last under CEO Lilach Asher-Topilsky, with net profit of NIS 427M, down 2.7% from the third quarter of 2018. Asher-Topilsky, who is to join FIMI Opportunity Funds, is being replaced by Uri Levin.

Ber Steps Down

Dr. Hedva Ber, supervisor of banks at the Bank of Israel, is leaving her post in April after five years on the job. During her term, Ber oversaw recommendations for the separation of credit card companies from Israeli banks and relaxation of some restrictions on the licensing of new banks.

FIMI Sells Shares

FIMI Opportunity Funds, a private equity fund headed by businessman Ishay Davidi, has sold an 8% interest in Beit Shemesh Engines for NIS 100M. The fund retains a 35% interest in the manufacturer of aircraft engines.

The Beit Shemesh sale comes shortly after FIMI sold another asset, shares in Ham-Let Israel Canada, for NIS 100M.

Mergers & Acquisitions

Huge Deal in Works?

International chipmaking giant Intel is in advanced negotiations for the acquisition of artificial intelligence chip developer Habana Labs. Negotiations are based on a valuation of between $1 and $2B, according to a report by Yediot Aharonot. The deal, if it is completed, would be the second-largest acquisition of an Israeli company by Intel, which paid $15.3B for driving safety developer Mobileye in 2017.

Based in Caesarea about midway between Tel Aviv and Haifa, Habana Labs develops processors optimized for artificial intelligence applications. Founded three years ago, its first investor and current chairman is Avigdor Willenz, a serial Israeli tech entrepreneur who was one of the founders of Galileo Technologies Ltd., sold in 2001 to Marvell Technology Group Ltd. for $2.7B. He also co-founded Annapurna Labs, sold to Amazon for $370M in 2015.

Habana Labs has a research and development center in Gdańsk, Poland, and employs 150 people overall in Israel, Poland, and San Jose, California. Among its products is Goya, a line of processors for artificial intelligence applications.

Baring-Lumenis

Lumenis, the Israeli aesthetic medical and laser specialist now headquartered in San Jose, California, has been sold to Baring Private Equity Asia at a valuation of about $1.2B. Lumenis was acquired in 2015 by XIO, a European fund with Asian roots, for $520M. Lumenis, which develops and markets light energy-based devices for medical treatment, has three divisions: aesthetic treatments (in which its first products were hair removal with lasers); ophthalmological surgery; and laser surgery.

Ribbon-ECI Telecom

Ribbon Communications of Westford, Massachusetts, says it has reached an agreement to acquire Israel’s ECI Telecom for $324M in cash and shares with an estimated value of $130M. ECI, headquartered in Petah Tikva east of Tel Aviv, provides a variety of network infrastructure solutions for service providers, critical industries and data center operators.

Invitea-Clear Genetics

Invitea, a genetic testing specialist based in San Francisco, has acquired Clear Genetics for $50M in cash and shares. Founded in the U.S. by Israeli genetics consultancy expert Dr. Motti Shohat, his daughter and son-in-law, Clear Genetics, which is also based in California, has developed a chatbot for making elements of genetic test results usually provided only by experts in the field available to consumers.

Kape-LTMI

Kape Technologies, controlled by Israeli gaming billionaire Teddy Sagi, is acquiring LTMI Holdings of Denver, Colorado in a deal valued at $127M in cash and other considerations. Key factor in London-based Kape’s acquisition was LTMI’s principal holding, privacy specialist Private Internet Access (PIA). Sagi is the founder of Playtech and principal owner of London’s Camden Market.

Check Point-Cymplify

Check Point Software Technologies, the Israeli-founded multinational information security market leader with headquarters in Tel Aviv and San Carlos, California, has acquired Cymplify of Tel Aviv for an undisclosed sum.

Founded earlier this year, Cymplify develops a firmware analysis engine that provides highly detailed cybersecurity posture reports.

Check Point also acquired P.L. Protego Labs, a serverless security specialist with headquarters in Baltimore, Maryland. Details were not disclosed but were estimated in the $40M range. Jerusalem-based Protego, founded two years ago by a group of former Cisco Systems engineers and cybersecurity veterans, has developed a cloud information security service capable of real-time detection of threats and attacks on serverless functions.

Il Makiage-NeoWize

Il Makiage, the international cosmetics company now headquartered in Israel, has acquired Israeli consumer artificial intelligence analytics specialist NeoWize for an undisclosed price. NeoWize, founded by two graduates of Israel Defense Forces technical units, says it uses big data to tailor content for individual users on websites to “improve the user experience and sales.”

Quotient-Ubimo

Quotient Technology, a California-based developer of retail marketing technology, is acquiring Israel AI-based advertising specialist Ubimo for an undisclosed sum. Ubimo, which has offices in central Tel Aviv, utilizes multiple data sets and proprietary location-marking technology to improve the efficacy of media campaigns.

Payoneer-Optile

Israeli online payment specialist Payoneer has acquired Optile GmbH of Munich for an undisclosed sum Its headquarters is in Petah Tikva east of Tel Aviv. Founded in 2005 with additional offices in New York and Hong Kong, Payoneer provides online money transfer and digital payment services using credit and debit cards, electronic wallets, and bank transfers. Among its clients: Airbnb, Google, and Amazon.

Tenable-Indegy

Tenable, a Columbia, Maryland-based cybersecurity firm with a market cap of over $2.5B, has acquired Israel’s Indegy for $120M. Indegy of Tel Aviv and New York, provides cybersecurity technology for industrial control systems for manufacturing, pharmaceuticals, energy, and water companies. Tenable will set up a development center in Israel.

Qualitest-AlgoTrace

In a transaction involving two Israeli companies Qualitest, a developer of automatic and manual software testing technology based in Petah Tikva, has acquired AlgoTrace, a specialist in data analysis and machine learning, which also operates out of Petah Tikva. Financial terms were not disclosed.

In July, U.S. private equity firm Bridgepoint paid $420M for a controlling interest in Qualitest, which employs about 2,000 people at operations in Israel, India, Europe U.K. and U.S.

Dupont-Desalitech

U.S.-based international chemical giant DuPont said in mid-December that it had acquired Israel’s Desalitech for an undisclosed price. Desalitech, which moved its corporate headquarters from central Israel to Boston in 2012, develops water purification and desalination systems using closed-circuit reverse osmosis technology.

FIMI Buys Kamada Shares

FIMI, the Israeli private equity fund headed by Ishai Davidi, has become the largest individual shareholder in Israeli biotech firm Kamada Ltd. by purchasing 12% of Kamada’s shares for a reported $30M. Kamada, with headquarters at the Weizmann Institute of Science in Rehovot, develops, manufacturers and markets medical products based on patent-protected advanced technology for purifying and separating proteins from human plasma.

FIMI also invested $36M to increase its holding in Amiad Water Systems from 18% to 46%. The company previously was controlled by Kibbutz Amiad in northern Israel.

Delek Sells Auto Interest

Delek Group, controlled by Yitzhak Tshuva, sold its remaining interest in auto importer Delek Automotive to a number of investment institutions. The sale is part of Delek Group’s continuing sale of its holdings outside the energy sector; in November, Delek Group completed sale of its 32.5% stake in Phoenix Insurance to foreign funds Centerbridge Partners and Gallatin Point Capital for NIS 1.6B, and soon afterward completed its acquisition of Chevron‘s North Sea oil assets for $1.8B.

Aerospace & Defense

Defense Export Plan Unveiled

A plan to increase Israeli defense exports was unveiled in late November by reserve brigadier general Yair Kulas, head of the Israel Defense Ministry’s International Defense Cooperation Directorate, commonly known as SIBAT, its Hebrew acronym. The plan includes focused seminars for senior commanders in foreign armies, IDF assistance for promoting sales of Israeli weapons, and subsidies for small and medium-sized defense companies seeking to sell arms around the world. According to a report in Globes, the plan seeks to compensate smaller defense firms for the relative advantage of large contractors like Israel Aerospace Industries (IAI) and Elbit Systems in utilizing SIBAT’s resources.

The development comes against the background of increased competition by larger Israeli defense firms on the European market. According to a report in Defense News, Israel’s big three: government-owned IAI and Rafael and private defense contractor Elbit, registered total European sales of about $2B this year.

According to Defense News, increased tensions in Europe has stimulated demand in Europe for missile defense systems and border-patrolling drones, areas where Israeli firms can offer systems that have proved their worth on the modern battlefield.

Multi-Year IDF Plan

Chief of Staff Lt. Gen. Aviv Kochavi presented the principles of the IDF’s multi-year plan to senior Defense Ministry officials and heads of the defense industries at a meeting in late November. Details of the plan were not disclosed, other than to say that it involves significant upgrades in offensive, defensive, intelligence, digital and other technological capabilities.

In a parallel development, Prime Minister Benjamin Netanyahu spoke in October of a NIS 4B increase in the defense budget. The Netanyahu comment has been interpreted as a restatement of a plan he dubbed the 2030 Security Concept, in which he advocated incrementally increasing defense spending to 6% of GDP regardless of the size of the entire government budget or level of security threats facing Israel.

German Missile Deal

Rafael will supply thousands of Spike anti-tank missiles to Germany in a deal valued at more than $200M. Several different types of missiles, as well as launchers for them, are being supplied through Eurospike, the Israeli defense contractor’s European subsidiary. Rafael says it has sold over 30,000 Spike missiles, which have a range of up to 30 kilometers and can be launched from land-based, airborne, and naval platforms, to more than 30 countries around the world.

Aviation Cyber Threat

The National Cyber Directorate has launched a broad assessment of potential cyber threats to aviation, according to a report in Globes. The project, conducted by Matrix Ltd., will rate cyber risks to control towers, airports, airspace, air control and commercial airlines.

Honduras Delivery

Israel Shipyards recently delivered an OPV 62M offshore patrol vessel to the Honduras Navy. The vessel left Haifa Port and was due to arrive in Honduras sometime in December, according to the Honduran newspaper La Prensa. The vessel, named General José Trinidad Cabañas, has been fitted with Rafael Spike missiles, a TechMer communications system, and a Terma radar system. Honduras has also purchased two remote-controlled weapon stations for existing vessels from Elbit Systems.

Submerged Systems

DSIT Solutions, a subsidiary of Rafael, recently won a tender to supply its Portable Acoustic Range (PAR) system to an undisclosed navy. PAR measures noise radiated by submarines and surface vessels, enabling navies and shipyards to monitor and control the noise and silence of their submarines and ships. Value of the contract was not disclosed.

Joint Cyber Exercise

The Israel Defense Forces Cyber Defense Directorate and the U.S. Cyber Command held their fourth Cyberdome exercise in early November. The drill, held in the U.S., was part of the two units’ annual training program and constitutes part of the two countries strategic partnership in cybersecurity defense. Israel was represented by the Cyber Defense Brigade, and members of the Intelligence Directorate, Air Force, Navy and Ground Forces.

Blue Flag 2019

About 70 aircraft and approximately 1,000 personnel from five countries took part in the fourth biennial Blue Flag exercise hosted by the Israeli Air Force, at Uvda AFB on November 3-14. The IDF noted that it was the first international “fifth-generation” exercise held in Israel involving the F-35 aircraft. Participating aircraft included Israeli F-15s, F-16Is and F-35s, dozens of aircraft from the U.S. (12 F-16s), Greece (4 F-16s), Germany (6 Eurofighter Typhoons), and Italy (6 Eurofighters, 6 F-35s, and one Gulfstream G-550).

Lockheed Martin Chosen

The Ministry of Defense has chosen U.S. defense contractor Lockheed Martin to operate its new F-35 training center. The contract is valued at about $42M. The training center is located at the Nevatim Air Force Base in southern Israel.

Elbit Revenues Rise

Elbit Systems posted $1.1B in revenue in the third quarter, 23% more than in the third quarter of 2018. Revenue totaled $3.2B in the first nine months of the year, up 22.3%, compared with the corresponding period last year. Most of the growth can be attributed to Elbit’s acquisition of IMI Systems, completed in the fourth quarter of 2018.

IAI Backlog

IAI reported net profit of $32M on sales of over $1B in the third quarter of 2019; sales were up 17% from QIII of 2018. Orders backlog amounted to $13.3B.

BGU Device in Orbit

NASA, the U.S. Space Agency, plans to send a miniature solar generator prototype developed at Israel’s Ben-Gurion University of the Negev to the International Space Station, BGU announced in late November. The generator, about the size of a U.S. 25-cent coin, was developed by Jeffrey Gordon of BGU’s solar energy and environmental physics department. It is designed to improve the power-to-weight ratio of spacecraft.

Mini Drones

Rafael, together with scientists from two Israeli universities, have developed tiny drones that can be launched from the palm of a hand. According to a report by Yediot Aharonot, the unmanned aerial vehicles weigh from a few dozen to a few hundred grams, can be fitted with miniature sensors, night-vision cameras and radar for reconnaissance missions, and can cost as little as $50 to produce. One drawback, according to the report, is that because of their size they can only carry power for a few minutes of use and have limited range for the transmission of data. The mini-drones were produced by Rafael in cooperation with computer science students at the Technion Institute of Technology in Haifa and Ben-Gurion University in Beersheba.

Defense Pioneer Dies

Aharon Beit-Halahmi, who was responsible for many of the technological advances of the IDF during his long career at the Defense Ministry, died in November at the age of 83. A former director-general of the ministry, Beit-Halahmi was among other things a key figure in the decision to establish the IDF’s now-famous technology units.

Kazakh UAV Assembly

A subsidiary of Kazakhstan Engineering is due to begin assembling Israeli unmanned aerial vehicles early next year. The announcement by state-owned Kazakhstan Engineering did not disclose which Israeli UAVs would be assembled but press speculation centers on a variation of Elbit Systems Skylark 1 light UAVs, a system which Kazakhstan has purchased in the past from the Israeli defense contractor. Skylark is or has been operated by a number of armies around the world, including those of Israel, the Czech Republic, Croatia, Macedonia, Hungary, the Netherlands, Poland, Slovakia, Sweden, the French Special Forces, Australia and Canada.

Artillery Commander

Major Efrat Kikov Levi has been appointed commander of the Hara’am Artillery Bridgade in the IDF’s Northern Command. The appointment of Kikov Levi, 32, from Kibbutz Tel Katzir in the Jordan Valley, is another step in the integration of women into IDF combat forces; two years ago, a female lieutenant-colonel made history as commander of the Artillery Corps UAV forces.

Eitan Order

The Ministry of Defense has informed subcontractors of their role in components of the Eitan, Israel’s next-generation APC. According to a report in Israel Defense, the ministry’s Tank Program Authority is responsible for construction of the turret, Rafael for Spike missile systems, and Elbit for the remainder of the vehicle including both fire control and active defense systems. Number of vehicles to be ordered for the IDF and financing for the project have not been disclosed, according to the report.

Next-Gen Steadicopter

Steadicopter, which specializes in Rotary Unmanned Aerial Systems (RUAS), has presented its Black Eagle 50 lightweight unmanned robotic helicopter in Airport City, just outside Ben-Gurion International Airport, in early November. The latest version produced by Steadicopter, which is based in Kfar Hamaccabim in central Israel, incorporates an inertial navigation system which operates independently of GPS and new features especially suitable for naval missions. The company recently signed a cooperative marketing agreement with Israel Shipyards.

Floating Dock

The Defense Ministry has signed a NIS 90M agreement to purchase a floating dock from Israel Shipyards. When completed in about two years, the dock will make it possible to raise Israel Navy submarines and Sa’ar 6 corvettes above sea level for maintenance and special repairs and facilitate installation of made-in-Israel systems on new vessels arriving from German shipyards where they were assembled.

Amos-17 in Place

Amos-17, the newest satellite of Israeli operator Space Communication (Spacecom) announced Monday that its newest satellite, AMOS-17, reached its designated orbital point in space in mid-November. Amos-17 was launched in August to replace Spacecom’s Amos-6, which in August 2016 exploded on a SpaceX launchpad. Amos-17 will provide communication services to Africa, a task originally assigned to Amos-6.

Verint Split

Verint Systems Inc., an Israeli company currently headquartered in Melville, New York, is splitting into two separate firms, one involving customer engagement, the other cyber intelligence. The split is due to be completed by January 2021.

Verint, headed since 1994 by Dan Bodner, provides systems and services for business and military intelligence including analytics, cyber and video monitoring, and military.

Czech Radar Deal

The Czech Republic is purchasing advanced radar systems developed by IAI subsidiary Elta Systems in a deal valued at $125M. The government-to-government contract, signed by Israeli Ministry of Defense officials and their Czech counterparts, is for eight ELM-2084 multi-mission radars. The systems, which are incorporated in Israel’s Iron Dome and David’s Sling missile defense systems and the Barak missile system, are to be deployed by the Czech Mobile Air Defense Radar program.

Rocket System Test

Israel conducted what it called a test of a “rocket propulsion” system in early December. Few details were made about the firing test, from the Palmachim base south of Tel Aviv, but media speculation suggested it might be of a new development in the top-secret Jericho family of missiles capable of carrying nuclear warheads. Iranian Foreign Minister Mohamed Zarif added to that speculation, saying that Israel had tested a nuclear missile aimed at Iran.

U.S. Armor Protection

U.S. armored vehicles are getting active protection systems made in Israel and Germany, according to reports in Jane’s and other non-Israeli sources. The systems include Strike Shield, made by Germany’s Rheinmetall, Trophy (Windbreaker) from Israel’s Rafael in M1 tanks, and Iron Fist systems from IMI, now owned by Israel’s Elbit Systems, in Bradley M2 fighting vehicles.

New Sights Deployed

Two configurations of XACT weapons sights made by Elbit Systems have become operational in the Israel Defense Forces. The th65 and th64 uncooled thermal imaging sights have been distributed to IDF infantry and special forces units. Elbit said last year that it had delivered 4,800 th65 sights to the Australian armed forces.

Indian Plane, Israeli and Russian Missiles

India’s Defense Research and Development Organization reported in early December that it had launched a naval version of India’s Tejas single-engine delta-wing multiple-use fighter aircraft fitted with both Israeli and Russian-made missiles. Derby, the Israeli system from Rafael, has long-range capabilities, while Russia’s R-73 is designed for close combat.

Frontex Fight

Israel, Italy and the U.S. are actively competing for a share of the budget for unmanned aerial vehicles of Frontex, the European Border and Coast Guard agency and the European Maritime Safety Agency (EMSA). According to a report in Israel Defense, Frontex officials have tested Heron 1 UAVs from IAI, Falco UAVs from Leonardo in Italy, and U.S.-made Predators from General Avionics. A number of European countries, including Lithuania, Bulgaria, France, Portugal, Croatia, Spain and the Netherlands are among the countries deploying or planning to deploy UAVs on maritime surveillance missions.

Elbit Unveils Magni

Defense contractor Elbit Systems has launched MAGNI, a fully autonomous and robust Multi-Rotor Vertical Take-Off and Landing Unmanned Aerial System designed to significantly enhance the situational awareness capabilities of mobile forces. MAGNI, which can be launched in less than a minute from any combat vehicle, incorporates a thermal payload, a communications suite (dual S-Band or LTE), an automatic coordinate tracking capability and built-in interface with Battle Management Systems (BMS) at altitudes of up to 4,000 feet.

Finland Missile Sale

IAI reportedly has sold rockets powered by Delila BS-151 engines to Finland, according to an article in Israel Defense. Attributing the information to a stock market report by Israeli aircraft engine manufacturer Beit Shemesh Engines, Israel Defense said the euro 162M transaction was completed in 2018 and involved digitally monitored turbojet engines capable of a Mach 0.9 maximum speed and altitudes of up to 3,500 feet. The rocket is known in Israel as Gavriel 5, SSM2020 by the Finnish Navy.

Quantas Grounds Converted Planes

Quantas, the Australian air carrier, said in mid-December that it was grounding four Boeing BA.N 737 freighter aircraft pending advice from IAI about a potential defect. According to a Reuters report, they have been carrying cargo on local Australian routes since they were converted by IAI in 2006. The part in question is a rigid barrier at the front of the cargo cabin separating freight from the cockpit.

After being informed of the problem by IAI, several other operators grounded their converted freighters. The planes began flying again on December 14-15, after the U.S. Federal Aviation Administration approved an interim fix of the problem.

Glass Battlefield

Rafael and lead contractor Atos, an international contractor with headquarters in Bezons, France, have been selected to explore “glass battlefield” technology for the German Army. As reported by Israel Defense, the study will run through 2023, and is designed to demonstrate the use of unmanned aerial systems in conjunction with combat vehicles to achieve a real-time, three-dimensional, dynamic situation picture for mobile operations, employing a C41 network with civilian and military components. Rafael is due to provide Fire Weaver, a three-dimensional many-to-many sensor-to-shooter system, and BNET, a broadband IP spectrum-sensing SDR system for air and land platforms.

Science & High Technology

National AI Plan Unveiled

An annual government investment of NIS 1-2B ($360-$720M) will be needed to establish Israel as one of the world’s top five counties in the development of artificial intelligence, according to a report whose contents were disclosed in late November. That investment is relatively small compared to other countries; China, for example, has adopted a $141B plan for developing AI as one of its core industries. The authors of the plan, Profs. Isaac Ben-Israel and Eviatar Matania, advocated a similar plan for the development of Israel’s cybersecurity sector some years ago.

Teva Gets OK

The U.S. Food and Drug Administration has approved Teva Pharmaceutical Industries‘ plan to manufacture part of Avjoy migraine-treatment at the company’s manufacturing facility in Kfar Saba. The facility will oversee the process of filling the syringes with the biological drug and will also conduct quality control tests for both the drug and the syringes. Ajovy, along with Austedo for Huntington’s disease and tardive dyskinesia, has been hailed as one of Teva’s main future money makers, intended to make up for dropping revenues of Copaxone, financially-troubled Teva’s blockbuster multiple sclerosis treatment.

In a separate development, the Wall Street Journal reported in late November that Teva was one of several large pharmaceutical companies being investigated in a U.S. federal probe into how the world market was flooded with opioid painkillers.

Growing Cannabis

Together Pharma, which grows cannabis at a farm near Ashkelon south of Tel Aviv, will cultivate at least five tons of cannabis for medical use for Canna-Tech. Value of the deal is estimated at NIS 192M.

In another cannabis-related development Intercure of Fort Lee, New Jersey is financing a study of the treatment of autistic children with cannabis at the Shamir Medical Center in Asaf Harofe, southeast of Tel Aviv. The study is being conducted through Canndoc, an Intercure subsidiary which also plans clinical trials to test the effect of cannabis on epilepsy, fibromyalgia, neuropathic pain, side effects of chemotherapy, Parkinson’s, arthritis and PTSD.

Permanent Flu Protection?

Jerusalem-based BiondVax Pharmaceuticals is currently conducting phase 3 clinical trials for its universal vaccine designed to provide immunity for multiple mutating forms of the influenza virus, according to a report by Yediot Aharonot. Ron Babecoff, who founded the company in 2004, says that his team headed by former Weizmann Institute immunologist and biochemist Tamar Ben-Yedidia, had developed a single vaccine which effectively broke the connection between the vaccine and the season or a specific strain, making it possible for the first time to manufacture a vaccine which can be stockpiled over years, avoiding the need to change formulations each year as the virus mutates. If the trial is successful, the vaccine could be on the market as soon as 2023.

Revolutionary Bacteria

Researchers at the Weizmann Institute of Science have developed bacteria nourished only from carbon present in the air, which eventually could help reduce the concentration of greenhouse gases in the atmosphere. The team’s goal, which is far from being realized, is developing a closed circle that generates biological fuel using the bacteria without harming the environment.

Water Agreement

Israel’s Mekorot water management company has signed an agreement with Wapcos, the Indian government’s engineering advisory body, to explore a possible master plan for India’s water resources. Improving the utilization of India’s water usage, Mekorot officials say, can stimulate significant raising of the Subcontinent’s standard of living.

Driver Monitoring

Eyesight Technologies, a developer of artificial intelligence computer vision solutions, says DriverSense, its driver monitoring solution, will be integrated into two new car models of a U.S. manufacturer whose production is due to start sometime next year. Eyesight CEO David Tolub calls the $15M order an important step in the vital process of ensuring secure transition between man and machine in driverless cars.

Michigan Pilot

Mobileye, the Jerusalem-based artificial intelligence driving safety specialist, will collaborate with the Michigan Department of Transportation and the Michigan Economic Development Authority in a six-month test of the Israeli firm’s technology in ice and snow conditions. In the test, Mobileye’s advanced driver assist systems will be installed in about 100 vehicles.

Hands-Free Crutches

Engineers at IAI cooperated with the TOM (Tikkun Olam Makers) NGO in the development of advanced crutches that can stand by themselves, leaving the user’s hands free for other tasks. According to media reports, the crutches, which have a kind of tripod base, are one of many projects developed by TOM (whose Hebrew name means Repairing the World) for injured soldiers and other people with disabilities.

Microsoft Probe

Microsoft has retained the services of former U.S. attorney general Eric Holder to head an investigation into whether facial recognition software developed by Israel’s AnyVision meets its corporate ethical standards. The investigation was spurred by reports that Microsoft’s investigation follows reports by Israel’s Haaretz and NBC that Israeli forces in the West Bank were using AnyVision to identify Palestinians at Israeli army checkpoints. Last June, Microsoft’s M12 venture arm participated in a $74M funding round of AnyVision, based in Holon just outside Tel Aviv. AnyVision has denied reports that the same facial recognition technology has been sold to or used by government authorities in Hong Kong.

EU Hub

The European Institute of Innovation and Technology (EIT) launched a new innovation hub, designed to create new opportunities for European and Israeli innovators, in Tel Aviv in mid-December. It is designed to support innovators from the health, climate, food, and urban mobility sectors.

AI Training

The government’s Israel Innovation Authority has announced plans to subsidize the training of artificial intelligence specialists in Israel. According to a report in Yediot Aharonot, start-ups and established companies who launch their own AI training programs will be eligible for three-year grants of up to NIS 2M.

Digital Health

AstraZeneca, the London-listed international pharmaceutical company, is partnering with Jerusalem Venture Partners and several other Israeli bodies to develop digital health services. Also involved in the program are the R&D arm of Israel’s Maccabi HMO, businessman (and Amdocs founder) Morris Kahn, the Israeli Sagol Fund, and Microsoft.

In an unrelated development, the Sheba Medical Center located in Tel Hashomer just east of Tel Aviv, has inaugurated a center aimed at fostering digital cooperation with hospitals around the world. About 20 start-ups have already located in a campus set up for the project on the hospital’s grounds.

Sompo Holdings, a Japanese insurance company, has signed an agreement with Israeli private hospital chain Assuta Medical Centers and Medicate Tech, a Tel Aviv-based medical cybersecurity start-up, to collaborate on developing methodology for cybersecurity consultation services between hospitals.

Seeking Investments

A delegation from Wipro, an Indian multinational provider of information technology, consulting and business process services, recently visited Israel in search of investment opportunities. The group, whose headquarters are in Bangalore, was founded in 1945.

Brazilian Angle

Grupo Globo, the Rio de Janiero-based Brazilian media giant, has invested $3.3M in Pixellot, an Israeli developer of technology for broadcasting sports events. Based east of Tel Aviv in Petah Tikva, Pixellot develops production technologies that provide live, multi-angled, panoramic HD broadcasts of sporting events. The company says it currently is involved in the broadcast of 80,000 hours of sports each month, and that its automated technology is already employed by some of the world’s leading football teams, including Barcelona, Real Madrid, Chelsea and Bayern Munich.

BIRD’s Changing Profile

When it was founded in 1977, the main objective of BIRD, the Israel-U.S. Binational Research and Development Foundation, was launching cooperative projects to help small companies and stimulate the Israeli economy. But, says Philip Singerman, who is retiring after nine years as the foundation’s head. “Things have changed over the last 40 years.” Today many of the projects getting funding help from BIRD involve large Israeli companies assisting smaller American companies benefitting from Israeli technology. Over the years BIRD, which is funded by the U.S. government, has invested over $354M in almost 1,000 cooperative projects.

$1.8B Valuation

WalkMe, an Israeli digital adoption company with headquarters in Tel Aviv and San Francisco, California, recently closed at $90M financing round based on an estimated company valuation of $1.8B. WalkMe’s products are designed to help enterprises realize the full potential of their software assets and empower digital transformation across their organization. The company is planning to expand its activities worldwide, including South America.

Sports Breakthrough

International chipmaking giant Intel is developing a new technology for sports viewing that will enable audiences to see a match from the vantage point of a player on the field, court or pitch. The technology, called True View, is being developed by Replay, a start-up based in Tel Aviv’s Ramat Hahayal neighborhood that Intel acquired four years ago for $175M. True View’s 360-degree personalized viewing technology has already been adopted by some leading sports clubs, including football giants Manchester City, Arsenal, Real Madrid and Barcelona, and the Washington Wizards of the NBA.

Nice’s Nice Asian Deals

Nice Systems, the data security specialist based in Ra’anana northeast of Tel Aviv, reported agreements with two Asian countries in December. The Israeli company said a multinational telecommunications firm has introduced Nice’s Robotic Process Automation across its networks in India, and that Chailese Holding of Taiwan, a specialist in leasing and financial services, has selected Nice’s Actimize financial crime management system for its anti-money laundering program.