Kratos to Expand Satellite Communication Capabilities with Orbit Technologies Acquisition
## Kratos Defense & Security Solutions Announces Strategic Acquisition of Orbit Technologies Ltd
**Kratos Defense & Security Solutions, Inc.** (NASDAQ: **KTOS**) announced its definitive agreement to acquire 100 percent of the ordinary shares of Israel-based **Orbit Technologies Ltd** (TASE: **ORBI**) for approximately $356.3 million. The acquisition will be funded entirely through cash on Kratos’ balance sheet, marking a significant strategic investment in the satellite communications sector.
## Transaction Details and Strategic Rationale
This transaction is poised to integrate Orbit’s specialized expertise in mission-critical satellite communication hardware for airborne, maritime, undersea, land, and unmanned systems into Kratos’ existing portfolio. Upon the anticipated closing by the end of March 2026, **Orbit** will report through Kratos’ Microwave Electronics Division (KMED), which maintains its headquarters in Jerusalem, Israel. The acquisition is subject to customary closing conditions, including specific approvals related to the acquisition of an Israel-based national security company by a non-Israeli entity.
The strategic impetus behind this acquisition is to leverage **Kratos**’ microwave technology alongside **Orbit**’s communication hardware, fostering product and customer synergies. Management anticipates that this combination will enable the sale of integrated microwave and communication solutions to a shared global customer base, creating immediate sources of revenue and operational synergy.
## Financial Implications and Market Context
**Kratos** management expects the acquisition of **Orbit** to be immediately accretive across virtually every financial metric. **Orbit** itself has demonstrated robust financial health, reporting a record order backlog of $134 million at the end of the first half of the year. In the second quarter, the company recorded $20 million in revenue and an operating profit of $3.8 million, both figures representing double-digit percentage increases over the corresponding period in the prior year.
The transaction also marks a notable exit for private equity firm **FIMI Opportunity Funds**, which invested $15 million in **Orbit** in 2018. Including dividends and sale proceeds, FIMI’s total income from **Orbit** is approximately $136 million, representing a nine-fold return on its initial investment.
## Broader Growth and Future Outlook
This acquisition aligns with **Kratos**’ recent trajectory of strong financial performance. In its third quarter of 2025, **Kratos** reported revenues of $347.6 million, a 26% increase year-over-year, driven by substantial organic growth in its Unmanned Systems and Government Solutions segments. The company also achieved a consolidated book-to-bill ratio of 1.2 to 1 and bookings of $414.1 million, alongside an improved net income of $8.7 million, up from $3.2 million in the third quarter of 2024.
> "I am honored by the opportunity to join a leading global defense company. This milestone marks a significant step for **Orbit**, enabling us to expand our business operations and strengthen our presence in the U.S. defense market."
These comments from Daniel Eshchar, CEO of **Orbit Communication Systems**, underscore the mutual strategic benefits of the merger. **Kratos** has also raised its full-year 2025 revenue guidance and projects continued growth into 2026 and 2027, with anticipated increases in both revenue and EBITDA margins. While the acquisition is expected to close by March 2026, **Kratos** will not incorporate **Orbit**'s financial forecasts into its guidance until after the transaction is finalized.
