“We want to reach $500 million in revenue”: Fibrotex turns to CVC for growth
The Blum family is selling a 40% stake for an expected $350 million, betting that a global partner can help expand the company’s reach while the family retains control.
Investment firm CVC is acquiring a 40% stake in Israeli defense company Fibrotex, Calcalist reported on Monday, citing sources familiar with the deal. CVC is purchasing the shares from existing shareholders through its Catalyst III sub-fund. The Blum family, which previously owned 100% of the company, will retain a controlling 60% stake.
The negotiations, led by Jefferies, lasted several months and are expected to generate approximately $350 million for the Blum family. Talks about bringing in a partner began in April and were previously reported by Calcalist.
“I am very proud that every shekel of tax revenue will go to the State, as all the shareholders live in Israel. We take pride in the fact that, during such a sensitive time, we are keeping the money in the country. The State will receive hundreds of millions of shekels in taxes as a result of this deal,” Fibrotex owner Adi Blum told Calcalist.
His comments follow a report in the Financial Times yesterday that CVC had chosen not to publicize the investment because of sensitivities surrounding investments in Israeli defense companies, limiting knowledge of the deal to a select circle. CVC has also been granted an option to increase its stake over the next five years, subject to the company meeting specific targets.
“I am delighted that CVC is our partner. It was the most suitable fund, both in terms of geographic reach and its ability to develop the company and expand into new markets. I couldn't have asked for a better partner. They really believed in us,” Blum said.
Why did you bring in a partner in the first place?
“We realized that to achieve exceptional growth, we needed a strong global partner to fast-track our entry into new markets. We could have sold 80% to 90% of the company at much higher valuations, and there were offers to that effect. But we decided to retain control because the company has growth potential that we want to capitalize on.”
Israeli defense companies listed on the stock exchange are facing declining valuations. Last week, NextVision lost 25% of its market value. Did this complicate negotiations with CVC?
“The defense market in Israel is not in crisis. Stock prices are falling because there was a bubble, with companies reaching valuations based on abnormal multiples. There is also a localized crisis in relations between Israel and Europe, but I believe it will be resolved. Our goal is to triple our operations and reach annual revenue of half a billion dollars within a few years, with the help of our new partner.”
Fibrotex develops, manufactures and implements advanced camouflage technologies for armies, special forces and police agencies. Its multispectral systems are designed to conceal combatants, facilities and vehicles from detection by the human eye and by thermal cameras, night-vision devices, radar and other advanced technologies.
Its products include camouflage systems for tanks, armored personnel carriers and command posts; specialized materials with thermal camouflage capabilities; sheets designed to absorb electromagnetic radiation; and personal camouflage suits and specialized clothing for elite military units.
Market estimates put Fibrotex’s 2025 revenue at $130 million to $150 million, with EBITDA in the tens of millions of dollars. Revenue in 2026 is expected to be significantly higher. The vast majority of the company’s sales go to the U.S. military and its various branches.
Fibrotex was founded by Eliezer (Leo) Blum, the family patriarch, who was born in Austria and immigrated to Israel from South America in the early 1960s. Initially a technical textile manufacturer, the company gradually moved into the defense sector and specialized in camouflage technologies. Today, it is a global leader in the field, which is evolving rapidly as drone technology and detection capabilities advance.
Martin Blum, one of Fibrotex’s owners, is the brother of Daniel Blum, the controlling shareholder of publicly traded defense company FMS. Listed on the Tel Aviv Stock Exchange, FMS has a market capitalization of approximately NIS 1.2 billion, after losing 55% of its value since last March.
Fibrotex’s largest customer is the U.S. military. In 2019, the company won a sole-source U.S. Army contract worth $480 million. It has since expanded its operations and secured additional contracts, each signed separately with specific branches of the U.S. defense establishment.
Fibrotex operates in approximately 20 countries and has supplied more than 250,000 systems worldwide. Its customers include armed forces and security agencies in Spain, France, Lithuania, the United Kingdom, the Netherlands and Finland, as well as countries in Southeast Asia.
Founded in 1981, CVC manages approximately €212 billion in assets and operates in around 30 countries. The firm previously acquired a 25% stake in Israeli technology company ironSource for $450 million. It also held talks to acquire a 40% stake in pharmacy chain Super-Pharm, but those negotiations did not result in a deal.
