Israel’s biggest publicly-traded defense company, Elbit Systems Ltd., bought a cybersecurity business three days after its chief executive officer said that industry has become a priority.
Elbit agreed to pay Nice Systems Ltd. as much as about $158 million for its cyber solutions and intelligence division, according to a filing to the Tel Aviv Stock Exchange on Thursday. The company will merge the acquisition with its recently created subsidiary, Cyberbit Ltd.
“We believe cyber will be a major growth engine for Elbit and that there is a unique opportunity for us to be big in this market,” Bezhalel Machlis, Elbit’s chief executive officer, said in a telephone interview. “Combining with Nice’s business will allow us to create synergies both by increasing our customer base and by improving our product portfolio.”
Demand for cybersecurity products is growing as global companies such as Sony Pictures Entertainment to JPMorgan Chase & Co. have been hurt with hacks and data breaches. Elbit will consider “internal measures” and acquisitions to remain ahead of industry trends, Machlis said in its first-quarter earnings release on May 18.
Shares of Elbit gained 2 percent to 301.70 shekels at the close of trading in Tel Aviv. Nice declined 0.8 percent.
Nice’s stock has nearly doubled in the past 12 months as the company boosts profit by tapping into growing demand for data analytics in its call center, security, and financial-fraud and compliance businesses. The sale of the cyber business was part of an effort to focus on what’s working for the company, said CEO Barak Eilam.
“We found that our cyber divison was a bit less synergetic to the rest of our business,” said Eilam. “This is the reason why we decided to sell to Elbit. It will allow us to focus our efforts in further growing our enterprise-software business.”