Key Takeaways
- • CVC Capital Partners agreed to acquire a 40% stake in Israeli defence technology company Fibrotex from the founding Blum family for approximately €250m, according to people familiar with the matter cited by the Financial Times.
- • The transaction is the largest of five investments signed by CVC Catalyst, the firm's mid-market fund, which was led by its German team.
- • Unlike the fund's four previous acquisitions, CVC disclosed the Fibrotex deal only to limited partners, not publicly.
- • CVC's investor communication described Fibrotex as an international business operating in the US, Japan and Australia without referencing its Israeli headquarters in Petah Tikva; after FT enquiries, CVC confirmed principal operations in Israel and the US.
- • Fibrotex, founded in 1965, makes camouflage and concealment systems designed to reduce detection by radar and thermal imaging; Calcalist previously reported a stake sale valued at roughly $1bn, with Jefferies appointed as adviser.
Summary
CVC Capital Partners has agreed to acquire a 40% stake in Israeli defence technology company Fibrotex, according to a report in the Financial Times. The Dutch-listed private equity firm is buying the stake from the founding Blum family for approximately €250m, according to people familiar with the matter. Adi Blum, an Israel Defense Forces veteran, will retain an interest in the business. The investment was led by CVC's German team through its mid-market Catalyst fund.
The deal is notable for how it was disclosed. The FT reported that the fund's four previous acquisitions were publicly announced, whereas CVC communicated the Fibrotex transaction only to its limited partners. According to the FT, the approach reflected concern about potential backlash over investing in Israel's defence sector amid the ongoing conflict in Gaza and heightened political tensions. The FT also reported that CVC's investor communication described Fibrotex as an international business operating in the US, Japan and Australia, without referencing its Israeli headquarters in Petah Tikva. Following enquiries from the FT, CVC confirmed that Fibrotex had principal operations in Israel and the US, serving customers in more than 20 countries.
CVC said the investment would support Fibrotex's international expansion and product development, amid rising defence modernisation and security requirements. Fibrotex, founded in 1965, develops camouflage and concealment systems for military personnel, vehicles, aircraft and naval assets. The transaction is the largest of five investments signed by CVC Catalyst to date. Israeli newspaper Calcalist previously reported that Fibrotex had appointed Jefferies to explore a stake sale at a valuation of approximately $1bn.
The deal reflects broader private equity interest in defence businesses, driven by increased European military spending following Russia's invasion of Ukraine. Investments tied to Israel's defence industry, however, face heightened scrutiny from institutional investors and other stakeholders. Naaguesh Appadu of Bayes Business School's M&A Research Centre told the FT that controversy does not necessarily make an investment inappropriate, but that opposition from limited partners and employees represents a genuine risk. One CVC Catalyst investor reportedly distinguishes between companies producing protective military equipment and those manufacturing weapons in its assessment of defence investments.
The deal is notable for how it was disclosed. The FT reported that the fund's four previous acquisitions were publicly announced, whereas CVC communicated the Fibrotex transaction only to its limited partners. According to the FT, the approach reflected concern about potential backlash over investing in Israel's defence sector amid the ongoing conflict in Gaza and heightened political tensions. The FT also reported that CVC's investor communication described Fibrotex as an international business operating in the US, Japan and Australia, without referencing its Israeli headquarters in Petah Tikva. Following enquiries from the FT, CVC confirmed that Fibrotex had principal operations in Israel and the US, serving customers in more than 20 countries.
CVC said the investment would support Fibrotex's international expansion and product development, amid rising defence modernisation and security requirements. Fibrotex, founded in 1965, develops camouflage and concealment systems for military personnel, vehicles, aircraft and naval assets. The transaction is the largest of five investments signed by CVC Catalyst to date. Israeli newspaper Calcalist previously reported that Fibrotex had appointed Jefferies to explore a stake sale at a valuation of approximately $1bn.
The deal reflects broader private equity interest in defence businesses, driven by increased European military spending following Russia's invasion of Ukraine. Investments tied to Israel's defence industry, however, face heightened scrutiny from institutional investors and other stakeholders. Naaguesh Appadu of Bayes Business School's M&A Research Centre told the FT that controversy does not necessarily make an investment inappropriate, but that opposition from limited partners and employees represents a genuine risk. One CVC Catalyst investor reportedly distinguishes between companies producing protective military equipment and those manufacturing weapons in its assessment of defence investments.
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