From Merkava to Namer: How IMCO Group Is Transforming Modern Warfare
At the forefront of advanced video, electrical, and control systems in the Israel Defense Forces' (IDF) armored vehicles stands IMCO Group, a veteran in the defense industry with over five decades of experience.
Renowned for developing solutions and sub-systems for the Namer Armored Personnel Carrier (APC), IMCO has recently undergone a significant transformation. CEO Ariel Kandel explains, "IMCO Group has undergone a major reorganization. It has evolved into a systems provider, delivering comprehensive solutions and sub-systems to its customers." Mr. Kandel emphasizes that the company advances in tandem with its clients, providing cutting-edge end-to-end solutions to enhance protection, precision, and ease of operation for soldiers in the field. Multi-year agreements with Israel's Defense Ministry, signed in May 2024, underscore IMCO's pivotal role in bolstering the readiness and overall capability of field forces.
The escalating global arms race, intensified by the Russia-Ukraine war, is fueling an unprecedented boom in Israel's defense industries. As a key strategic supplier to the Defense Ministry and major defense firms such as Elbit and Rafael for over 50 years, IMCO Group's products and services are in increased demand, with customer trust reflected in multi-year orders. To meet this rising demand, IMCO has developed new, comprehensive, and innovative technologies and services.
IMCO has transitioned from supplying individual products—monitors, display computers, video switchboards, electrical systems, electro-optical and electro-mechanical assemblies, and harness sets—to becoming a systems integrator. The company now assembles its products into complete solutions and sub-systems, including electro-optical perimeter protection systems, vehicle infrastructure management and control systems, along with weapons command and control systems.
IMCO supports its clients throughout the entire product lifecycle, from initial proposal through product adaptation, engineering planning, production, support, and maintenance.
A History of Mergers and Acquisitions
Founded in 1974 by Yosef Yakir, IMCO began as a privately owned company manufacturing, integrating, and developing electrical systems for Israel's defense industries. It became publicly traded on the Tel Aviv Stock Exchange in 1992. Through strategic mergers and acquisitions, the Group has expanded significantly, now comprising two business divisions that integrate the operations of its five subsidiaries in Israel and the USA.
IMCO has contributed to developing sophisticated IDF combat vehicles, including the Merkava tank, the Namer and the Eitan APCs. The company has also provided video systems for air and naval platforms of the IDF and other global customers. Its role in advancing sophisticated systems for the Namer APC has given the IDF a crucial technological edge on the battlefield. In recognition of its contributions, the Group was among the companies honored with the 2024 President's Award for Israel's Security.
With extensive expertise and thorough market knowledge, IMCO positions itself as a one-stop shop for video solutions, observation systems, protective gear, command and control displays, production, and maintenance services. The company specializes in advanced and tailored solutions (both build-to-spec and build-to-print), customizing its range of products for diverse military applications on land, sea, and air, for each client and platform.
IMCO employs approximately 500 people across various sites in Israel and the USA. The company is structured into two main divisions: the Defense division, comprising IMCO Projects, Nir-Or Ltd., and ADTI (Advanced Defense Technologies, Inc.); and the Industrial division, comprising Atena and EMT.
Significant Contracts and Strong Financial Performance
In 2023, IMCO's sales totaled NIS 266 million, with 70% of revenue from the defense sector and 30% from the industrial sector. In May 2024, the company secured a new NIS 377 million framework contract from the Israeli Defense Ministry (building on previous agreements) to supply electrical systems for IDF armored fighting vehicles (AFVs). This contract effectively doubles the company's backlog of Defense Ministry orders, with deliveries scheduled through the end of the decade. This contract is among several multi-year contracts awarded this year, covering large-scale production, maintenance and spare parts supply.
IMCO's CEO Ariel Kandel comments on this achievement: "The advanced solutions and sub-systems we offer are the result of years of R&D and are combat-proven. Our recent framework agreements with Israel's Defense Ministry reflect IMCO's integral role in sustaining the overall strength of maneuvering forces. Our systems have been operational for decades, enhancing mission efficiency and safety. We are proud to be selected again as a loyal partner and supplier of these critical systems."
Complete Solutions and Sub-Systems
Kandel, who assumed the CEO role over a year and a half ago, brings a wealth of experience to IMCO. With a background in electronics engineering and computer science, he boasts three decades of experience in managing defense companies. Elaborating on the company's strategic shift, Kandel explains, "Immediately after I took on the role, we decided to make a strategic organizational change in the company, both operationally and business-wise, a change that was demonstrated on the stock exchange. In the first phase, we united all the company's capabilities into complete solutions and sub-systems. In the past, each subsidiary operated and sold its products independently. Now, all companies in the Defense Division sell their products together, and the companies in the Industrial Division also sell their products together as complete solutions and sub-systems. We evolved into a systems provider."
He provides a strategic example: "The Ministry of Defense, for example, manufactures an entire vehicle, designs and develops it, and we provide certain parts. Until now, we supplied displays, harnesses, and electrical systems separately. Now we offer a complete sub-system, from development and planning to production, support, and maintenance. We do the same with Rafael and Elbit—they upgrade armored vehicles, and we provide them with display systems and electro-optics as a sub-package. For the customer, it is much more convenient and cost-effective to purchase a complete solution or sub-system rather than separate components."
Kandel emphasizes that the organizational change is reflected not only in uniting the products into solutions and sub-systems but also in unifying raw material procurement: "Since COVID-19, one of the main problems in the global industrial sector worldwide has been a shortage of raw materials. In the past, each subsidiary purchased its raw materials independently. To create operational continuity and avoid shortages, we unified the procurement activities of our subsidiaries under one procurement unit, and the organizational structure changed accordingly."
Replicating Success Internationally
In recent years, IMCO has solidified its expertise in Armored Fighting Vehicles (AFVs), accumulating extensive technological and operational experience. The company maintains close contact with field forces, allowing its employees to continuously identify areas for improvement. While AFVs remain a core focus, IMCO continues to diversify its operations. The Group provides airborne and naval solutions, including video and display systems, electro-optics, communication converters, and airborne computers. IMCO is also involved in remotely controlled weapons systems and manufactures critical components for strategic defense systems such as the Iron Dome. Recently, the company started providing final integration services (assembly and testing) for advanced systems in the drones and robotics fields.
Business Model and International Expansion
"The large companies and the Ministry of Defense are the suppliers of complete solutions directly to the end customer, which is, of course, the IDF, alongside other customers worldwide to whom the solutions are exported," Kandel explains. "We operate as a subcontractor in these projects, both with the Ministry of Defense and with Rafael, Elbit, and the Israeli aerospace industries, supplying them with solutions and sub-systems."
Unique Technology
Kandel highlights IMCO's technological contributions: "We supply all electrical and control sub-systems for IDF armored vehicles. We also develop and supply display, video, and contract management systems for perimeter protection solutions on naval vessels. Our goal is to continually improve and bring solutions that make the vehicles more protected and simpler to operate for soldiers. In the recent war, terrorists tried to approach vehicles and place explosives near them. Our perimeter protection solutions are designed to help prevent such incidents."
Industrial Division
"In our Industrial Division, we are involved in manufacturing and assembling aesthetic medical systems and equipment, collaborating with industry leaders such as Lumenis and Alma Lasers," says Kandel. "We also produce traditional medical equipment systems tailored for medical operating rooms. Our client portfolio extends to prominent manufacturers of advanced semiconductor systems, including KLA and Shemer Jabil. For these clients, we manufacture complex assemblies and harnesses essential for semiconductor production line machinery."
Vision for the Future
Looking ahead, Kandel outlines IMCO's strategic direction: "Our activity in the international market does not compete with our existing customers, with whom we will continue to deepen our relationships and remain a significant subcontractor and long-term partner. The goal is to replicate our success internationally and work with integrators in Europe and the USA, thereby expanding the range of technologies, services, and knowledge we can provide to our customers. We are already seeing rapid growth in our US subsidiary's activity, and the goal is to grow not only there but also in other markets."
Kandel adds: "Beyond expanding our reputation and capabilities globally, we are evolving into a 'system house' for specific sectors among our major clients. This arises from our commitment to providing comprehensive end-to-end solutions and meeting the increasing demands for fast and high-quality delivery. With the Group's new organizational structure enhancing our operational efficiency and aligning with our business strategy, we aim to sustain our growth rates in all economic and operational metrics achieved in the past year. This is just the beginning."
