The Defense Ministry is delaying approval of a planned takeover of Amprest Systems, a company that develops command-and-control software for the Iron Dome air defense system, amid concerns over foreign control of sensitive defense technology, according to people familiar with the matter.
The deal would give U.S.-listed holding company Ondas Holdings control of Amprest, whose software plays a central role in Iron Dome and other air defense systems. Ondas is seeking to buy out Amprest’s shareholders for about $100 million, valuing the company at more than $200 million. If completed, the transaction would leave Rafael Advanced Defense Systems, the developer and manufacturer of Iron Dome, as a minority shareholder.
Amprest’s largest shareholder today is Rafael. The remaining shares are held by Amprest founder and CEO Natan Barak, the OurCrowd investment platform and other investors.
The transaction is being reviewed by the Defense Ministry’s Department for Security of the Defense Establishment, known by its Hebrew acronym Malmab, headed by Yuval Shimoni. Officials involved in the review have raised concerns about a foreign company gaining control of Amprest given its classified activities tied to Iron Dome and other air defense programs.
People close to the deal said the prolonged review has delayed the transaction for several months, with no clear timeline or outcome. The holdup has underscored tensions inside the Defense Ministry between efforts to attract foreign investment into defense technology and strict security oversight that can slow or block such deals.
Amprest was founded about 25 years ago by Barak, a retired Navy officer with the rank of colonel. Its profile rose roughly 15 years ago after its command-and-control software was integrated into Iron Dome. In 2012, Amprest received the Israel Defense Prize for its role in developing the air defense system.
Most of Amprest’s activity is in the military sector, with Rafael as its main customer. The company had never been put up for sale before Ondas made its offer. One person involved in the talks described the proposal as “an offer shareholders couldn’t refuse.”
Critics of the delay say the lack of coordination inside the Defense Ministry sends mixed messages to investors. While Director General Maj. Gen. (res.) Amir Baram and the head of the Defense Ministry’s research and development directorate, Brig. Gen. (res.) Danny Gold, have publicly encouraged deeper cooperation with foreign investors to increase capital flows into defense-tech companies, Malmab has effectively become a bottleneck, they say.
“There is no holistic view,” said a senior source familiar with the process. “Each body looks at the issue through its own narrow lens, with interests that sometimes clash. Investors put tens of millions of dollars into Amprest years ago and are now told they cannot exit for security reasons. Under those conditions, who will want to invest in defense tech?”
Supporters of the deal argue it could move forward under strict conditions that safeguard security interests, including limits on access, governance and technology transfer. They say the current process has been marked by unusually slow decision-making and heavy bureaucracy.
Ondas, which trades on Nasdaq, has rapidly expanded its footprint in the local defense sector since the Oct. 7 war, assembling a portfolio of nine defense-related companies. The company says it has spent about $400 million on acquisitions to date.
Its recent purchases include Sentrycs, which develops counter-drone technologies, acquired in November for $125 million in cash and $100 million in stock, and Roboteam, a military ground robotics company, bought for about $80 million. Ondas has also acquired M4 Defense, Iron Drone, Apeiro Motion, Insight Intelligent Sensors and S.P.O., a manufacturer of precision optical components.
In late 2022, Ondas acquired Airobotics for about $15 million and folded it into American Robotics. Airobotics developed autonomous drones and received approval from the U.S. Federal Aviation Administration to operate over populated areas.
The company’s leadership includes several former senior figures from Rafael. Among them are former Rafael CEO Maj. Gen. (res.) Yoav Har-Even, who serves on Ondas’ advisory board, and Brig. Gen. (res.) Oshri Lugassy, a former senior engineering officer who until late 2023 served as a senior executive at Rafael and now acts as Ondas’ co-CEO.
Some industry figures have voiced concern over Ondas’ rapid growth and sharply rising market valuation, which has climbed to about $5 billion after the company raised roughly $1 billion in a large stock offering. One market source compared the surge to the speculative SPAC boom earlier in the decade.
“The Iron Dome name is a premium brand,” the source said. “Ondas needs it to impress investors and open doors.”
Questions have also been raised about what Rafael stands to gain from the Amprest transaction. Rafael is expected to remain Amprest’s main customer even if Ondas ultimately takes control.
At the same time, Ondas is in talks with Rafael over the possible purchase of Controp, another subsidiary that develops electro-optical systems, including cameras for unmanned aerial vehicles. Unlike Amprest, Controp has been openly offered for sale. Last summer, U.S.-based AeroVironment was reported to be interested in acquiring a 50% stake in Controp at a valuation of at least $600 million to $700 million.
Ondas declined to comment. The Defense Ministry said defense exports are rising but stressed there would be no compromise on security needs. Rafael said any sale of holdings in defense companies is subject to strict regulation and approval by the Defense Ministry and the Government Companies Authority, adding that it has always operated under those rules and will continue to do so.