U.S. defense firm Kratos to acquire Israel’s Orbit in $356 million deal
The deal strengthens the American contractor’s foothold in satellite communications and expands its Israeli operations amid global weapons modernization.
U.S. defense technology company Kratos Defense & Security Solutions announced a definitive agreement to acquire Orbit Technologies for $356.3 million in cash, in a deal that will deepen Kratos’ presence in Israel and expand its reach across global defense and satellite communications markets.
The acquisition, to be funded entirely from Kratos’ cash reserves, will see the Tel Aviv–listed Orbit become part of Kratos’ Microwave Electronics Division (KMED), headquartered in Jerusalem. The merger is expected to close by March 2026, pending standard regulatory approvals, including clearances related to the acquisition of an Israeli national security company by a foreign buyer.
Orbit, a longtime supplier to militaries and defense contractors worldwide, designs and manufactures satellite-based communication systems for a range of mobile and unmanned platforms, including aerial, maritime, undersea, and land systems. Its hardware and communications technologies are used by air forces, prime contractors, and emerging space companies across the United States, Europe, Israel, and the Pacific.
The acquisition is expected to be immediately accretive across nearly all financial metrics for Kratos, which is traded on Nasdaq under the ticker KTOS.
“We are truly excited about combining Orbit with Kratos,” said Yonah Adelman, president of Kratos Microwave Electronics. “We believe this is a 1 + 1 = 3 or more situation for our customers, partners, employees, and stakeholders. Together, our microwave and communications technologies can bring differentiating, leading capabilities to the market.”
Kratos President and CEO Eric DeMarco described the acquisition as “a negotiated transaction” that strengthens Kratos’ core mission in defense and national security.
“Orbit checks every box in a Kratos acquisition — leadership, culture, mission-committed employees, and battle-proven technology,” DeMarco said. “Major customers of Orbit are also existing customers of Kratos, adding to our conviction in this transaction’s projected success. There is a global recapitalization of weapon systems underway, and Orbit significantly advances Kratos’ position to take advantage of this.”
Orbit CEO Daniel Eshchar called the deal “a significant milestone,” saying it would expand Orbit’s operations and strengthen its position in the U.S. defense market.
Once the transaction closes, Orbit will report directly to Kratos’ Microwave Electronics Division, which already plays a key role in the company’s work on satellite communications, radar, and advanced weapon systems.
The FIMI Fund, led by Ishai Davidi, became Orbit’s controlling shareholder in 2017 after acquiring 44% of the company for NIS 54 million. In April 2024, FIMI sold 16% of its stake for NIS 100 million, and in June it sold an additional portion for NIS 50 million, bringing its current holding to 22.5%.
As part of the current deal, FIMI is expected to receive approximately $80 million (around NIS 260 million), representing a return of more than seven times its original investment, excluding dividends.
