Defense Ministry Halts $100 Million Acquisition of Iron Dome Software Creator by American Firm
The Israeli Ministry of Defense has blocked a proposed $100 million takeover of mPrest Systems by a United States corporation, this decision effectively stops foreign ownership of the critical software powering the Iron Dome missile defense system. Security officials intervened to prevent the transfer of sensitive intellectual property to Ondas Holdings, the move highlights a growing rift between economic interests and national security priorities.
Strategic Autonomy Becomes Priority for Defense Sector
mPrest Systems has operated for 25 years as a central pillar of the local defense infrastructure, the company gained global prominence roughly 15 years ago when it developed the Command and Control software that serves as the digital brain for the Iron Dome. This technology performs the complex real-time calculations necessary to intercept incoming rocket threats, the firm received the Israel Defense Award in 2012 for these contributions to public safety. While the United States has historically provided billions in funding for the production of physical Iron Dome batteries, the underlying source code has remained strictly under domestic ownership, this distinction maintains what officials describe as a necessary black box of proprietary technology.
Security Agency Vetoes Deal Despite High Valuation
The blocked transaction involved Ondas Holdings attempting to buy a controlling stake in mPrest for approximately $100 million, the total company valuation was set at over $200 million during the negotiations. Malmab, the security department within the Defense Ministry, refused to grant approval after an extensive review period, the agency functions as the primary gatekeeper for sensitive technology transfers and is led by Yuval Shimoni. State-owned contractor Rafael Advanced Defense Systems currently holds the largest share of mPrest, the proposed deal would have diluted Rafael to a minority position and removed its governance control.
The rejection occurred despite the fact that Ondas employs several former high-ranking Israeli defense officials, this indicates that personal connections could not overcome the rigid security protocols enforced by the state. Executives at the American firm include former Rafael leadership, yet the government remained firm on keeping the "Crown Jewels" of its defense capabilities out of foreign hands. A significant internal debate has emerged between the Director General who favors attracting foreign capital and the security establishment that prioritizes total technological isolation.
Investors Face New Uncertainty in Tech Market
This regulatory intervention sends a warning signal to the global venture capital community regarding the liquidity of defense investments, shareholders who injected capital into mPrest a decade ago now lack a viable exit strategy because the government has effectively deemed the asset unsellable. Analysts suggest this reflects a "Fortress Israel" economic doctrine that prioritizes independence over foreign capital integration, the policy creates direct friction between officials seeking to attract global funds and security agencies focused on insulation.
Experts believe the deal might only proceed if the company agrees to completely separate its classified military division from its commercial operations, the Defense Ministry is expected to tighten control over future software projects to ensure they remain domestic from inception.
