Jun 29, 2022

Capstone Partners Advised Rafael Advanced Defense Systems on Its Acquisition of PVP Advanced EO Systems

Capstone Partners advised Rafael Advanced Defense Systems Ltd.—a designer, developer, and manufacturer of advanced defense systems—on its acquisition of PVP Advanced EO Systems, Inc. (PVP AEO). Terms of the deal were not disclosed.

RAFAEL is a world-renowned Israeli-based defense contractor, specializing in innovative, and combat-proven systems, such as the famous IRON DOME, TROPHY Active Protection System, LITENING Targeting Pod, SPIKE family of tactical missiles, and many other air/land/sea systems. Rafael USA, Inc. has operated from Bethesda, MD since 1993 and serves as the hub for all RAFAEL operations in the United States.

The acquisition of PVP AEO continues a significant period of growth for the company, which includes the standing of RSGS, an all-American subsidiary that received its classified clearance earlier this year; the expansion of its C4ATS manufacturing subsidiary which specializes in assembly and procurement; and the launch of R2S, a joint venture with Raytheon Technologies that specializes in manufacturing and testing.

Capstone’s Aerospace, Defense and Government group provided invaluable strategic insights and evaluated several layers of acquisition targets, leading us to find the right platform to serve as a manufacturing flagship for Rafael. The deal team ran a comprehensive sweep of defense technology companies, negotiating with diplomacy the many turns a foreign buyer may face in the M&A process. Excellent investment banking advisory service.


“This acquisition is part of RAFAEL’s continued strategic investments, with the purpose of transferring technologies, products, and systems into the United States in support of U.S. national security. Until recently most of RAFAEL’s operations in the U.S. were in partnership with U.S. tier-1 prime contractors, while the majority of workshare was manufactured in Israel. PVP AEO will complement and enhance engineering and manufacturing capabilities stateside, while strengthening our U.S. supply chain to better support our prime contractors and U.S. warfighters,” said Major General (ret.) Yoav Har Even, President and CEO of Rafael Advanced Defense Systems.

Capstone Managing Director and former U.S. Navy Commander, Tess Oxenstierna, underscored “the importance of finding the right target, whose engineering skills and manufacturing team complemented Rafael’s technology offerings. We were honored to have achieved a strategic objective for Rafael—their partnership and trust in us were the basis of a successful collaboration.”

Prior to the acquisition, PVP AEO was a privately-owned, California-based company, specializing in the development, manufacturing, and sustainment of world-class electro-optic (EO) systems for air, land, sea, and critical homeland security applications.

PVP AEO was founded in 1997 and is located in Tustin, CA. Recent programs include Integrated Fixed Towers (IFT) and Mobile Video Surveillance Systems (MVSS) for Customs and Border Patrol on the U.S. southern border. PVP AEO is active in North and South America, Asia, and the Middle East.

The expert investment banking professionals on Capstone Partners’ ADGS Team works with leading middle market companies operating in the Defense market to advise with their strategic decision-making in order to maximize financial outcomes at every stage of the business lifecycle. Our firm has developed a full suite of corporate finance solutions, including M&A advisory, debt advisory, financial advisory, and equity capital financing to help privately owned businesses and private equity firms address any need, ranging from growth and financial or operational advisement to an ultimate exit transaction. To learn more about this transaction, or about the benefits of starting a relationship with our Defense Banking Team, contact us here.