Elbit Systems Ltd.

Type	Public
Traded as	TASE: ESLT NASDAQ: ESLT
Industry	Aerospace, Defence, IT
Founded	1967
Headquarters	Haifa, Israel
Key people	Michael Federmann (Chairman of the board), Joseph Ackerman (President and CEO)
Products	Defence Electronics Radio communications systems Unmanned aerial vehicles Remote weapon systems Radar Naval systems
Revenue	US$ 2,670 million (2010)[1]
Operating income	$ 207.35 million (2010)
Profit	$ 183.5 million (2010)
Employees	12,317 (2010)
Subsidiaries	Elbit Systems of America, Tadiran Communications Ltd., Electro-Optics Elop Ltd. (Elop), Elisra, Cyclone Aviation Products, UAV Tactical Systems Ltd. (U-TacS)
Website	www.elbitsystems.com

Elbit System headquarters in Matam, Haifa technology park

Elbit Skylark 1 unmanned aerial vehicle

Elbit Hermes 450 unmanned aerial vehicle

Elbit Hermes 900 unmanned aerial vehicle

Elbit Systems Ltd. is a defense electronics manufacturers and integrators. Established in 1967, and based in Haifa, Israel, Elbit employs 11,000 people worldwide.

Elbit Systems is traded on NASDAQ as well as on the Tel Aviv Stock Exchange where it is a constitute of the TA-25 Index of leading shares; As of 2010, over 45% of its stock is owned or controlled by Michael Federmann, who serves as the company's Chairman of the Board.^[2]

History[link]

Early years – A division within Elron[link]

Elbit Systems was founded in 1966 by Elron Electronic Industries (TASE: ELRN), which combined the existing expertise within the Israel Ministry of Defense-Research Institute in special computer design with Elron's experience in electronic product design, manufacture and management (initially under the name Elbit Computers). Elbit steadily expanded developing and producing logistic-support weapon delivery and navigation systems for most Israeli aircraft, establishing a combat avionics package for the IAI Lavi fighter aircraft, and producing a fire-control system for the Merkava tank.^[3]

1996 IPO on NASDAQ[link]

In 1996, Elbit spun off into three independent companies:

• Elbit Medical Imaging NASDAQ: EMITF - During 1999 to 2000 Elscint (Another affiliate of Elron) and Elbit Medical Imaging sold their imaging activities to General Electric Medical Systems and to Picker (now part of Philips Medical Systems) for approximately $600 million.
• Elbit Systems – Created as the defence electronics arm of Elbit, the company had an initial public offering on the NASDAQ stock market and finished its first day of trading at a price of $7.75 (on 25 August 2009 it reached an all time high of $70.69).
• Elbit - which focused on communications activities and in 1999 led the consortium that founded Partner Communications Company Ltd., Israel's first GSM operator NASDAQ: PTNR. In 2002, Elbit was merged into Elron. Elron sold its shares in Partner during 2003-2006 for approximately $160 million.

Merger with El-Op[link]

In 2000 Elbit Systems merged with El-Op (a company controlled by the current Chairman, Michael Federmann), creating the largest non governmental defense electronics company in Israel and increasing Elbit Systems' value which later in 2004 enabled Elron to sell its shares in Elbit Systems for approximately $200 million. Following the merger with El-Op, Michael Federmann became the largest shareholder in the combined group.

Growth by acquisition[link]

Following the merger with El-Op, Michael Federmann and CEO Joseph Ackerman led an aggressive growth by acquisitions strategy. The company acquired companies, including:

• Elisra (70% ownership)
• Tadiran Communications
• Shiron Satellite Communications
• BVR Systems
• Assets of Israel Military Industries’ Aircraft Systems Division
• Innovative Concepts, Inc.
• Mikal Ltd (the company initially purchased 19% of the firm, and later agreed to acquire Mikal's 100% holdings in Soltam Systems and Saymar and the 87.85% portion of ITL held by Mikal, in exchange Mikal's owners received the 19% of Mikal that Elbit had purchased)^[4] Elbit subsequently announced a cash tender offer for the 12.15% remainder of ITL held by the public.^[5]

Major subsidiaries[link]

Elbit's major subsidiaries and affiliated companies include Elbit Systems Electro-Optics Industries Elop (Elop), Cyclone Aviation Products (Cyclone), Tadiran Communications, Silver Arrow, Ortek, and Elisra. Among products manufactured by Elbit are the Enhanced Tactical Computer and the Elbit Hermes 450 unmanned aerial vehicle.

Former holdings and spin-offs[link]

• Elbit Vision Systems (NASDAQ: EVSNF) - a developer and manufacturer of Automated Optical Inspection solutions for textile manufacturing processes, founded in 1992 and had an initial public offering on the NASDAQ in 1996.
• Chip PC Technologies (TASE: CPPC) - a developer and manufacturer of thin client solutions for server-based computing; Elbit acquired 20% of the company is 2005.^[6]

Global presence[link]

Europe[link]

France - On 19 June 2011, Elbit announced that its subsidiary Elisra Electronic Systems Ltd. was awarded a contract valued at approximately €5 million to supply hundreds of units of its AN/PRC-684 Personal Locator Beacon to the French Ministry of Defense, equipping the French Air Force, Army, Navy and DGA (Direction Générale de l'Armement). The project is to be performed within 24 months.^[7]

Italy - On 22 June 2011, Elbit announced that it was awarded a contract valued in excess of $15 million by Elettronica S.p.A to participate in a program to supply the ELT/572 DIRCM (Directed Infra-Red Countermeasures) system for installation on various platforms of the Italian Air Force, including the C130J, C27J and AW101. The contract is to be performed over the next three years.^[8]

Romania - Elbit Systems' activities in Romania, which started in 1996, are primarily carried out through its wholly owned Romanian subsidiaries, Elbit Systeme S.A., A-E Electronics S.A, Elmet International SRL and Simultec SRL, which employ approximately 400 employees.^[9] On 24 May 2011, Elbit announced that it was awarded a contract valued at approximately $18.6 million to upgrade the Romanian Air Forces' C-130 transport aircraft. According to the agreement, the C-130 aircraft will be installed with various types of advanced electronic systems, including those produced by Elbit Systems' wholly owned subsidiary - Elisra Electronic Systems Ltd. The project, to be performed over four years, will be executed in cooperation with local companies in Romania, lead by the Romanian Aeronautical Industry.^[9]

United Kingdom - In 2005 Elbit set up a joint venture company in the UK with Thales, UAV Tactical Systems Ltd (U-TacS), developing the British Army Watchkeeper WK450. On 7 December 2007 it was announced that QinetiQ will join the programme as a sub-contractor to provide testing services at ParcAberporth, West Wales.^[10] In 2007, Elbit acquired Ferranti Technologies (Group) Limited.^[11]

North America[link]

United States - Elbit owns several companies in the United States through its American subsidiary, Elbit Systems of America (ESA):

• EFW in Fort Worth, Texas (the EFW facility also houses ESA's home office)
  • EFW manufactures various components for the F-16, V-22, and Bradley Fighting Vehicle, among other programs. It was initially the electronics manufacturing facility for General Dynamics operations in Fort Worth; when GD sold its aviation business to Lockheed Martin the latter was not interested in the facility which was then sold to Elbit.^[12]
• IEI in Talladega, Alabama (formerly International Enterprises, Inc.)
• Kollsman Inc. in Merrimack, New Hampshire (founded in 1928 by Paul Kollsman, who invented barometers and instrument flight in airplanes)
  • Kollsman is a subcontractor to Boeing on SBInet, a high-tech security system for the U.S.-Mexico border in conjunction with the United States Department of Homeland Security.^[13]
• Talla-Com in Tallahassee, Florida
• Innovative Concepts, Inc. (ICI) in McLean, Virginia, purchased in November 2008 from Herley Industries^[14]
• VSI in San Jose, California (a joint venture with Rockwell Collins, formerly known as Vision Systems International; Elbit and Rockwell Collins each own 50%)
• UAS Dynamics in Fort Mill, South Carolina (originally a 50-50 joint venture with General Dynamics Armament and Technical Products; on December 1, 2011 Elbit purchased GD's 50% share)^[15]
• M7 Aerospace in San Antonio, Texas^[16]

South America[link]

Brazil - In 2001, Aeroeletronica (AEL), a Brazilian company that had more than two decades of experience in the defense industry has become a part of the Elbit Systems Group.^[17] In January 2011, Elbit announced that it had bought two more Brazilian companies: Ares Aeroespecial e Defesa, and Periscopio Equipamentos Optronicos.^[18] In April 2011,Embraer has entered into a strategic agreement with AEL Sistemas S.A (“AEL”), a wholly owned subsidiary of Elbit Systems. The two companies were yet to define the specific programs to be pursued but, according to officials from the two companies, the main goals of the cooperation were the expanding of joint activities in the area of unmanned aircraft systems, including the anticipated creation of a jointly owned company, with majority participation of Embraer D&S. One of the primary goals of the joint venture will be to promote the introduction and use of Elbit Systems Hermes 450 UAV in the service of the Brazilian Air Force.^[19]

Colombia - In March 2010, a $28 million contract for Hermes 450 UAVs was suspended by the Colombian government after media reports based on anonymous letters alleged that Colombian officials had been bribed.^[20][21] The Israeli Ministry of Defense investigated and found that the letters likely came from Israel Aerospace Industries, a competitor that lost the tender.^[20] The incident led to a review of the regulations governing overseas competition between Israeli defense companies.^[20]

Divestment[link]

On September 3, 2009, the Norwegian Pension Fund's ethical council decided to sell the fund's stocks in Elbit due to the corporations supply of surveillance systems for the Israeli West Bank barrier.^[22] At a press conference to announce the decision, Minister of Finance Kristin Halvorsen said "We do not wish to fund companies that so directly contribute to violations of international humanitarian law". The Norwegian Ambassador to Israel was called to a meeting at the Israeli Foreign Ministry where the decision was protested.^[23]

In January 2010, Danske Bank added Elbit to the list of companies that fail its Socially Responsible Investment policy; a bank spokesman noted that it was acting in the interests of its customers by not 'placing their money in companies that violate international standards'.^[24][25] The Danish financial watchdog Danwatch has also placed Elbit on its ethical blacklist,^[26] and one of Denmark's largest pension fund administrators PKA Ltd announced it will no longer consider investing in Elbit, stating "The ICJ [International Court of Justice, the Hague] stated that the barrier only serves military purposes and violates Palestinian human rights. Therefore we have looked at whether companies produce custom-designed products to the wall and thus has a particular involvement in repressive activities."^[25]

In March 2010, a Swedish pension fund not wanting to be associated with companies violating international treaties, boycotted Elbit Systems for being involved in constructing the Israeli West Bank security fence.^[27]

See also[link]

• Economy of Israel
• Science and technology in Israel
• Military-Industrial Complex

References[link]

External links[link]

• Elbit Systems Limited web site
• Elbit Systems of America web site
• Watchkeeper Tactical UAV system