CVC keeps Fibrotex stake purchase unannounced amid Israel defence sensitivities

Traders Union
All News
Financial News
CVC keeps Fibrotex stake quiet

Highlights

CVC acquires a 40% stake in Israeli defence company Fibrotex for about €250mn but keeps the deal unannounced due to sensitivity around Israeli military ties.
CVC presents Fibrotex as a global company, omitting its Israeli base, amid increased scrutiny and import bans related to Israel’s defence sector by the UK, France, and Canada.
Defence sector assets gain investor traction post-Ukraine war, but CVC faces potential backlash from LPs and employees over links to Israeli military suppliers.

Deal structure and disclosure approach

As first reported by the Financial Times, CVC chooses not to publicly announce its purchase of a minority holding in Fibrotex, an unusual step for the firm as it signs what is described as the largest of the five deals completed through its mid-market Catalyst fund. People familiar with the matter say CVC's German team has been in talks with Fibrotex founder Adi Blum for years, and the agreed transaction values the 40% stake bought from the Blum family at about €250mn.

Adi Blum, a veteran of the Israel Defense Forces, remains invested in the company. In a communication to investors, CVC describes Fibrotex as a global business with operations in the U.S., Japan and Australia, while avoiding mention that the company is based in Petah Tikva, Israel.

After being contacted, CVC says Fibrotex has principal locations in Israel and the U.S. and serves an international customer base across more than 20 countries. The firm adds that Catalyst is pleased to acquire the minority stake and plans to support Fibrotex's international expansion and innovation amid long-term defence modernisation and rising security requirements.

Political backdrop and investor implications

The investment comes as European-Israeli relations remain sensitive and as the war in Gaza and settler violence in the West Bank increase scrutiny of business ties to Israel's defence sector. Last month, the UK, alongside France and Canada, announces an import ban on goods and some services linked to Israeli settlements in the occupied West Bank.

Naaguesh Appadu of the M&A Research Centre at Bayes Business School in London says controversy is common when investing in Israel, but that does not make an investment inherently wrong. He adds that backlash from limited partners and employees is a genuine risk for private equity groups.

Defence assets continue to attract investor interest since Russia's full-scale invasion of Ukraine prompts a broader European rearmament push. One investor in the CVC Catalyst fund says they distinguish between businesses that make non-combat materials and those that produce weapons.

Fibrotex has made camouflage systems for armies and special forces since 1965, including concealment products for soldiers, vehicles, aircraft and boats across woodland, desert and snow environments. The company says its products reduce radar and thermal detection, and it draws on the experience of former combat and special forces soldiers as well as chemistry and physics engineers.

Israeli newspaper Calcalist reports in April that Fibrotex hires Jefferies to sell a stake at a valuation of about $1bn. Fibrotex does not immediately respond to a request for comment.

Our earlier coverage examined how the Kremlin’s framing of the Ukraine war as an existential fight has driven a broader, more aggressive strategy since 2022. We noted that Russia has been shifting state resources from civilian areas toward defense spending while expanding hybrid operations in Europe—developments that raise regional security risks and matter for investors assessing exposure to defense-related themes.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.