TEL AVIV (Reuters) - Israeli defense firm Elbit Systems (ESLT.TA) (ESLT.O), which is in the final stages of buying state-owned rival IMI Systems, is already on the hunt for more acquisitions, its chief executive said on Tuesday.
The Israeli government said it expects to complete the 1.8 billion shekel ($517 million) sale of weapons maker IMI by July 1, pending regulatory approval. The deal will likely make Elbit the country’s biggest defense contractor.
Elbit, a maker of drones, pilot helmet displays and cyber security systems, also reported higher fourth-quarter net profit on Tuesday on record revenue.
“The acquisition of IMI will allow us to sell more, mainly around the world, and allow more production,” CEO Bezhalel Machlis told Reuters.
He said it would bring synergies primarily to three areas: long-range precision rockets, active protection for land-based systems, and guided munitions.
Machlis said there is a trend in the industry towards consolidation and he expects Elbit to buy up more companies.
“Our target markets are the United States, Europe, Australia ... We are continuing to look for acquisitions. Our balance sheet can support this,” he said. “There are a few things we are looking into in depth in Elbit’s target markets.”
He also noted that a number of defense budgets globally were on the rise, with the areas in which Elbit is focused receiving increased priority.
Elbit said it earned $2.01 per diluted share excluding one-time items in the fourth quarter, up from $1.82 a year earlier.
Revenue rose to $1.01 billion from $953.7 million.
Elbit’s order backlog climbed to $7.65 billion at the end of December from $6.91 billion a year earlier.
Elbit declared a dividend of 44 cents per share for the fourth quarter, unchanged from the third quarter.
Additional reporting by Tova Cohen; Editing by Adrian Croft