Laser Defense Firm Sivan Technologies Targets NIS 1.8B Tel Aviv IPO
High-power laser defense firm Sivan Technologies is preparing a Tel Aviv IPO at a valuation of NIS 1.2-1.8 billion, aiming to raise up to NIS 350 million amid a continuing wave of defense listings.
Despite a recent cooling in the Tel Aviv IPO market and sharp declines in defense stock valuations, high-tech defense companies continue to push toward the local stock exchange. Globes has learned that Sivan Technologies, a high-power laser defense company, is currently advancing an initial public offering (IPO) on the Tel Aviv Stock Exchange at an estimated valuation of NIS 1.2 billion to NIS 1.8 billion (pre-money).
As part of the move, expected to launch in the coming months, Sivan aims to raise NIS 250 million to NIS 350 million from local investors. Simultaneously, existing shareholders—including the US investment fund Ella and First Manhattan, which together hold about half of the company's shares—are expected to sell a portion of their holdings through an offer for sale.
Founded in 2008 by serial entrepreneur Dr. Eyal Shekel, Sivan specializes in high-power lasers. In its early years, the company operated primarily under the radar in the civilian sector, providing products for welding and joining advanced materials. In recent years, however, the company entered the defense sector. Sivan provides core technology for the Iron Beam laser air defense system, developed by Rafael in partnership with Elbit Systems. Additionally, the company applies its technology to optical communications in the air and space.
Iron Beam and Cost-Effectiveness
Iron Beam, which was delivered to the IDF late last year, is designed to serve as a complementary layer to existing air defense systems (Iron Dome, David's Sling, and Arrow) to protect against rockets, missiles, UAVs, and drones.
The main advantage of the system lies in intercept cost. While an Iron Dome interception is estimated at roughly $30,000, an Iron Beam interception costs only about $5 to $10 in consumables. On the other hand, laser interceptor challenges include a significant drop in efficiency during cloud cover and haze, alongside the requirement for widespread system deployment.
The Partnership with Elbit and Arbitration
Sivan entered the defense sector several years ago during a financing round that included Elbit Systems. Elbit invested an estimated total of under $10 million over the years and currently holds about 5% of the company's shares. Alongside this stake, Elbit received exclusive rights to sell the product in the defense market, which later sparked disputes between the parties.
Earlier this year, Sivan approached the court requesting modifications to its agreement with Elbit to independently market military laser systems based on its proprietary technology. Following a mediation process overseen by the Ministry of Defense, the parties reached an agreement whereby Sivan's technology sales in Israel are conducted exclusively through Elbit's laser subsidiary, Elop, while international sales of systems under one kilowatt of energy can be conducted independently.
Revenue and Valuation Goals
Estimates indicate that Sivan has generated annual revenues in the tens of millions of dollars in recent years. Driven by soaring demand for defense technology, the company reportedly holds an order backlog worth hundreds of millions of dollars, both domestically and internationally. This backlog is expected to support the high valuation sought for the IPO.
The company's last funding round was executed at an estimated valuation of $350 million (NIS 1.1 billion), with projections that the company could command an even higher valuation during the public offering. Some internal sources are targeting a valuation of $550 million to $600 million (NIS 1.7 billion to NIS 1.8 billion).
Defense IPO Wave Continues
Sivan's prospective IPO follows a wave of public offerings that swept the local capital market over the past two years, with 21 new companies joining the Tel Aviv Stock Exchange since the beginning of the year, raising capital at a valuation of NIS 33 billion. This represents a peak for the TASE since the COVID-19-driven IPO boom of 2021.
Defense companies have stood out during this wave, with no fewer than seven going public to replicate the success of sector stocks that surged by tens, hundreds, and even thousands of percents over the past three years amid wars in Ukraine and Israel, and a global rearmament race.
Despite a recent correction that saw defense stocks lose tens of percentage points and the TASE defense index drop over 40% from its March peak, mid-sized defense firms continue targeting the stock exchange. Among them is Plasan, a manufacturer of protective armor for military vehicles, which is currently advancing an IPO targeting a NIS 2.5 billion valuation.
