- Defense spending cycles are long and price-insensitive.
- T3 Defense identifies 'irreplaceable' subcontractors for acquisition.
- Traditional industries like metal processing are experiencing a defense boom.
- Strategic investment prioritizes product and people over pure financials.
The global landscape is shifting, ushering in what Menny Shalom, CEO of T3 Defense, calls a 'defense era.' Speaking at the Defense Tech Expo 2026 in Tel Aviv, Shalom outlined the unique characteristics of this burgeoning sector and T3 Defense's strategic approach to capitalizing on its immense potential.
Shalom emphasized that unlike other industries, the defense sector operates on delayed, long cycles, and crucially, exhibits a striking insensitivity to price. "If we need a tank or a submarine or an anti-drone, we buy it whatever the price is," he stated, highlighting the urgency and necessity that often override cost considerations in national security. This unique economic model, coupled with geopolitical realities, presents a compelling story for public companies and investors.
T3 Defense's strategy is rooted in a meticulous identification process. Shalom revealed that his firm has developed 22 criteria to pinpoint ideal acquisition targets, leading to a global pool of 440 potential companies, with a significant concentration in the US and Israel. Surprisingly, 40% of these targets are in 'boring' sectors like metal processing. These foundational industrial processes, essential for building everything from submarines to drones, currently boast backlogs stretching up to 15 years, underscoring the unprecedented demand within the defense supply chain.
The firm's investment philosophy extends beyond mere financial metrics. T3 aims to "imagine the modern battlefield" and identify the critical "building blocks" required for its evolution. By acquiring these essential components, T3 provides financing, management, and marketing to help these companies scale globally. Shalom illustrated this with the example of a US submarine project, which involves around 2,000 subcontractors, with 15-20 deemed irreplaceable. T3's focus is on acquiring these crucial, long-term partners.
Shalom concluded by stressing the importance of a strategic, rather than purely financial, perspective. While many investors focus solely on Excel spreadsheets and multiples, T3 delves into the underlying product, the interconnectivity within its holding companies, and most importantly, the people behind the innovation. This human-centric approach, combined with a deep understanding of the market and its competitors, positions T3 Defense at the forefront of this new and exciting defense investment journey.
“We are entering a defense era and a defense era as opposed to other parts is very interesting: it's delayed, meaning the minute a war starts or a president says he wants a golden dome, it takes few years... defense cycles are very long... and there is no sensitivity to price.”
- Menny Shalom, CEO of T3 Defense
