M&A

Rafael-Elron Partnership Shifts Gears: RDC to Explore Acquisitions of Defense-Tech Companies

Posted on by Techtime
[Photo above: Lisya Bahar Manoah, Chairperson, Elron Ventures & Managing Partner, Arieli Group & Yaniv Schneider, CEO, Elron Ventures]

As part of the publication of its 2025 annual report, Elron Ventures announced a strategic shift in its joint activity with RDC, its long-running partnership with Rafael. The company said that, alongside its role as an investor in early-stage technology companies, it now intends to expand RDC’s activity into mergers and acquisitions, with a particular focus on examining controlling stakes in early-stage defense-tech companies. According to Elron, the move has been approved by the boards of Elron and RDC, and remains subject to approval by Rafael’s board as well as the required regulatory clearances. Elron also said it expects to complete between one and three exit transactions from its portfolio over the next 12 months, including secondary deals.

RDC is a joint venture between Elron and Rafael that has been operating for more than three decades. According to the company, Elron holds 50.1% of RDC and Rafael holds 49.9%. The partnership was designed to combine Elron’s investment and venture-building capabilities with Rafael’s technological, engineering and industrial strengths. Over the years, RDC has served as a platform for launching ventures, investing in technology companies and commercializing Rafael technologies in civilian markets. The company says RDC also holds rights to commercialize Rafael technologies in civilian markets, and that the partnership benefits from access to Rafael experts for technology due diligence, joint development with portfolio companies, and in some cases connections to first customers or defense markets with high barriers to entry.

In practice, each side contributes a different layer to the partnership. Elron brings the investment platform, company-building support, work with entrepreneurs, board involvement and portfolio management. Rafael contributes engineering know-how, expertise in areas such as defense systems, sensing, autonomy, software and infrastructure, as well as the ability to help evaluate technologies and open doors to defense and government markets. Over the years, a range of companies have grown out of RDC or with its support, and the current portfolio includes, among others, CyberRidge, Wonder Robotics, Red Access, Tamnoon and OpenLegacy.

The strategic shift now announced by Elron marks a move away from an emphasis on minority stakes toward a model that may also include controlling holdings. According to the company, the rationale is that in defense tech, where development cycles can be long, markets are sensitive and barriers to entry are high, control can enable deeper company-building and value creation than a small financial stake. The move also fits the broader market backdrop: rising global defense budgets, growing venture capital investment in defense technologies, and increased M&A activity in the sector. From Elron’s perspective, the change is meant to add a new growth engine to the partnership with Rafael, rather than limiting it to sourcing companies and participating in funding rounds.

Elron defines its current focus around defense tech, deep tech, cybersecurity, software, and to a lesser extent a legacy portfolio of medical device companies. Founded in 1961, the company says it has completed more than 20 exits with an aggregate value of over $2.8 billion since 2010. Today it holds, directly and indirectly, 26 portfolio companies, including through CyberFuture, the cybersecurity investment club it established with a group of global chief information security officers.

The annual report presents 2025 as a relatively positive year for the company. Elron posted net profit of about $9.3 million, following exits that generated roughly $40 million in proceeds. During the year, it made two new investments, in Addionics and CyberRidge, alongside seven follow-on investments. It also reported a new 2026 investment in cybersecurity company Raven. According to the figures presented by the company, its consolidated NAV stands at about $183.9 million, of which about $54.9 million was in liquid resources as of mid-March 2026. The company also returned about $15 million to shareholders during 2025 through dividends and share buybacks.

Looking ahead, Elron is trying to maintain several tracks at once: continuing to invest in growth companies across cybersecurity, deep tech and defense tech; pursuing exits from parts of the portfolio; and at the same time building a new layer with Rafael around acquiring and holding companies. The move still requires approvals and will need to prove itself in execution, but it clearly signals the new direction of the partnership between the two companies.

Sony in Talks to Sell Sony Semiconductor Israel

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Pictured above: Universal communication chip for IoT applications, developed by Sony Semiconductor Israel.

Sony is currently exploring the sale of its cellular chip division, Sony Semiconductor Israel, which was formed following its 2016 acquisition of the israeli star-up Altair Semiconductor for $212 million. According to an exclusive report from Reuters, the company has begun engaging with investment bankers to prepare for a possible sale. The unit develops LTE cellular chips, primarily for Internet of Things (IoT) applications, and employs several dozen people in Israel. Its annual revenues are estimated at around $80 million. Sources familiar with the matter told Reuters that the division’s expected valuation is approximately $300 million.

Despite Advanced Technology, It Failed to Become a Growth Engine

Sony’s acquisition of Altair was part of a broader strategy to expand its footprint in the semiconductor market and integrate smart cellular connectivity into its consumer devices. Altair had developed highly efficient chips designed for LTE networks used in smart meters, connected cameras, and M2M devices. It was one of the first companies in the world to offer fully commercialized solutions in this domain. However, it never matured into a significant growth driver.

Although the company introduced advanced LTE chip technology for the IoT sector, its revenues remained flat at roughly $80 million annually. Since its acquisition, it failed to significantly expand its market share or break into broader markets. As a result, it has remained a niche tech unit within a global corporate giant. In fact, Sony’s asking price for the division reflects a negative return on investment when adjusted for inflation.

Sony’s current CEO, Kenichiro Yoshida, has in recent years led a strategic refocusing of the corporation, emphasizing high-profit sectors and trimming operations with lower returns. Sony is now concentrating on areas where it holds a clear competitive edge—such as digital entertainment, gaming, music, and imaging sensors.

It is important to note that Sony operates a major semiconductor division beyond its Israeli arm. The main unit, Sony Semiconductor Solutions Corporation, specializes in CMOS image sensors, smartphone camera chips, and components for autonomous vehicles. This division is one of Sony’s most profitable and serves the company’s core markets. It operates independently from Sony Semiconductor Israel, which has seen no substantial growth and does not serve a strategic core market—making it, despite its technological achievements, a natural candidate for divestiture.

SatixFy Acquisition Finalized: To Be Integrated into MDA’s Satellite Division

Posted on by Techtime

[Above: Assembly of an Aurora satellite at MDA’s manufacturing facility in Montreal]

The sale of SatixFy, headquartered in both Rehovot, Israel and the UK, to Canadian space technology company MDA Space, has been finalized. In the coming days, SatixFy’s shares will be delisted from the New York Stock Exchange, and all of its employees and operations will be integrated into MDA’s Satellite Systems division. The total value of the deal amounts to approximately $356 million, comprising a $280 million company valuation and $76 million in assumed debt that MDA has committed to cover. This follows a prior acquisition in September 2023, when MDA purchased SatixFy’s UK-based Digital Payload Division for around $40 million.

Founded in 2012 by the late Yoel Gat, SatixFy has invested around $270 million in developing ASIC and RFIC chips for advanced digital satellite communication. Of that, approximately $75 million came from grants from the UK Space Agency. The company’s chips support cutting-edge technologies such as electronically steered multibeam antennas, beamforming, beam-hopping, and software-defined radio (SDR) modems. SatixFy holds 60 registered and pending patents and currently employs about 165 people.

From Crisis to Acquisition

The company faced a major downturn in 2022, with a 50% drop in sales. Although revenues recovered in 2024, SatixFy continued to post net losses and rising debt. In Q1 2025, revenue rose 158% year-over-year to $4.9 million, but the company still reported a net loss of $10.3 million. Notably, only about $900,000 came from product sales—the rest was generated from R&D services and custom projects, reflecting the company’s unique positioning in the market.

Canada’s Rising Space Power

SatixFy’s technology targets the fast-growing Software-Defined Digital Satellite (SDDS) market. A recent report by NSR estimated that by the end of this decade, 89% of all new communication satellites will rely on SDDS technology. The acquisition positions MDA to compete more aggressively in this evolving segment.

Founded in 1969, MDA initially provided robotic systems to NASA. Over the years, the company underwent several transformations, including an unsuccessful attempt to relocate to the U.S. to compete for American government contracts.

Now headquartered in Montreal, MDA employs about 3,400 people. Its 2024 revenue totaled $1.1 billion, and it projects $1.5–1.65 billion in 2025. Roughly 60% of MDA’s revenue comes from MEO/LEO satellite manufacturing, 23% from robotic arms and space systems, and the remaining 17% from analytics services and ground station support for Earth observation satellites.

MDA’s flagship product is the Aurora digital satellite line, which will now directly benefit from SatixFy’s technology. Among other contracts, MDA is currently producing 198 Aurora satellites for Telesat Canada’s Lightspeed program, under a deal valued at approximately $2.4 billion.