Israel’s booming defense sector is poised to add another major player to the public markets, with Bagira Systems advancing plans for an initial public offering on the Tel Aviv Stock Exchange at a valuation of about 2.5 billion shekels ($775 million), ynet's sister publication Calcalist reported Tuesday.
Bagira Systems, owned by the Mizrahi family, designs, develops and operates military training systems and simulators aimed at improving combat readiness. According to the company’s website, its simulators are used by hundreds of thousands of soldiers worldwide in about 40 countries. In recent weeks, company representatives have been meeting with capital market underwriters to promote the planned listing and select the firm that will lead the offering.
Founded in 1995, Bagira is named after the black panther character in Rudyard Kipling’s The Jungle Book, and its logo features a tiger paw. The company is regarded as a veteran and well-established player in the local defense industry. Over the years, it has supplied Israel’s defense establishment, on a customized basis, with a range of simulators replicating various operational scenarios.
Industry estimates suggest the timing of Bagira’s move toward an IPO is deliberate. Over the past year, the company sold services worth about 400 million shekels ($124 million) to Israel’s defense establishment, benefiting from heightened demand for military training and preparedness.
Bagira currently operates nearly 50 training facilities, primarily in southern Israel, and employs about 400 workers who train IDF units. Its simulators consist of large-scale screens before which soldiers train individually or in squads, allowing preparation for combat across a wide range of scenarios, including urban warfare and open-terrain fighting.
In addition, the company provides mobile training equipment tailored to open-field combat, enabling forces to simulate rapidly changing battlefield conditions.
Large-scale contracts
Israel’s military simulation sector is characterized by large contracts that can reach hundreds of millions of shekels, covering the construction of training facilities as well as the supply and long-term maintenance of equipment.
Despite strong demand, driven in part by the war, the market includes only a limited number of players. In extreme cases, Defense Ministry tenders are conducted with a single supplier.
One of Bagira’s main competitors in Israel is Elbit Systems, which also builds combat simulators. Abroad, Bagira competes with companies such as Thales and Rheinmetall.
The scale of contracts in the sector was highlighted by a petition Bagira filed in January 2023 with the Tel Aviv District Court, seeking to void an agreement between the Defense Ministry and Elbit Systems for the construction of three training centers for IDF armored forces, valued at about 400 million shekels ($124 million).
In the petition, Bagira argued that the Defense Ministry had engaged Elbit as a sole supplier without issuing a tender or conducting a competitive process, thereby preventing Bagira from competing for the project. The Defense Ministry’s procurement administration and Elbit agreed on a multiyear contract planned for 18 years: Elbit was to build the training centers during the first three years and then operate and maintain them for an additional 15 years.
Beyond the domestic market, Bagira plans to highlight another growth engine — Europe — in presentations to institutional investors as part of its road show. The company operates in key markets including the Netherlands, Germany, Britain and the Czech Republic, where it maintains a production line. Activity in those countries is conducted through subsidiaries following a corporate reorganization. Against expectations of rising defense budgets in Europe, driven by the Russian threat and the protracted Russia-Ukraine war, Bagira estimates its operations on the continent will expand. The company also serves as an official supplier to NATO.
Bagira Systems is wholly owned by Bagira Holdings, controlled by the Mizrahi family. The principal shareholder, holding 50%, is Arieh Mizrahi, a former chairman of Israel Military Industries, a former chief artillery officer and a former director general of the Housing and Construction Ministry. The company is managed by his son Yaron Mizrahi, who holds 25% of the shares, while another son, Sagie Mizrahi, holds the remaining 25%.
Arieh Mizrahi also owns Armaz, an engineering and defense consulting firm that has provided advisory services to countries in Latin America. Retired Maj. Gen. Yoel Strick, a former head of Northern Command and commander of the Ground Forces, serves as president of Bagira Israel.
NATO supplier
Speaking with Calcalist, Bagira CEO Yaron Mizrahi said that since the outbreak of the Oct. 7 war and the sharp rise in demand for the company’s products, its workforce has grown by about 80% to 410 employees. He said the company plans to hire dozens more workers over the coming year. Mizrahi added that the company moved its headquarters Holon to Modi’in last year.
Bagira is a supplier to NATO, maintains a subsidiary in the Czech Republic and serves customers across Europe, alongside its activity in Britain, Germany and the Netherlands.
Mizrahi said many armies that have been acquiring major weapons systems and advanced combat platforms in recent years are also increasing demand for relevant training. “Simulators allow them to deal with combat scenarios across a range of operational environments, while addressing current threats,” he said. Asked about the possibility of an IPO, Mizrahi said, “We are constantly examining options and do not rule out any. We are an attractive company. When we decide to go public, we will do so.”
Efforts to advance the IPO come amid a surge in defense-related stocks. Defense industry indices in the United States and Israel are up about 59% since the start of the year. Shares of Elbit Systems, for example, have risen about 90% since the beginning of the year and are currently valued at roughly 84 billion shekels ($26 billion).
Shares of NextVision, which have climbed about 248% since the start of the year and carry a market value of about 17.8 billion shekels ($5.51 billion), have also fueled growing appetite among local and foreign investors for Israeli defense companies.
The wave of defense-related listings also includes plans by Plasan, owned by Kibbutz Sasa. Plasan initially sought to go public at a valuation of about 1.25 billion shekels ($388 million) but is currently advancing an alternative plan under which part of its operations would merge with Carmochrome of Karmiel, another defense sector firm. The merged company is expected to pursue an IPO in 2026 at an estimated valuation of about 1 billion shekels ($310 million).
Plasan operates in the field of protection solutions for military and civilian vehicles and develops armor systems for armored combat vehicles, including Israel’s main battle tanks and armored personnel carriers, as well as protection solutions for naval vessels and aircraft.