Rafael to Sell 50% Stake in Controp to AeroVironment

Israeli defense technology firm Rafael Advanced Defense Systems is in advanced talks to sell 50 percent of its stake in subsidiary Controp Precision Technologies, with U.S.-based AeroVironment emerging as the leading bidder.

The deal values Controp between US$600 million and US$700 million, though Rafael is reportedly seeking a higher valuation. Rothschild & Co. is advising on the transaction. Controp develops electro-optical and precision motion systems widely used in defense and security applications. In 2024, the company posted strong results with US$150 million in revenue (up from US$115 million in 2023) and US$8 million net profit, a sharp rise from US$2.5 million a year earlier.

Key Highlights

• Rafael to divest 50 percent of Controp in a US$600–700M deal
• Controp revenue surged to US$150M with US$8M net profit in 2024
• Move boosts flexibility by removing Controp’s government-owned status

Additionally, Controp plans to list its subsidiary MicroCon Vision on the Tel Aviv Stock Exchange at a valuation of 300–400 million shekels (US$88.8m–118.5m).

The partial divestiture will reduce Rafael’s stake from 100 percent to 50 percent, effectively removing Controp from government-owned company status. This move reflects broader challenges faced by Israeli state-owned defense firms, including restrictions on salaries, stock options, and decision-making flexibility. Rafael will retain significant control but gain the operational agility needed to compete globally against private defense contractors.

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The transaction highlights a wider industry trend where defense firms restructure portfolios to emphasize next-generation capabilities rather than scale expansion. AeroVironment, with revenues of US$820 million and US$43 million in net profit in FY2025, sees the acquisition as an opportunity to strengthen its technological edge in electro-optical systems, a critical area in modern conflicts where advanced surveillance and targeting technologies are in high demand.