Magic Software Enterprises

Magic Software Enterprises Ltd. combined software products with IT services. It operated through two business segments: software services and solutions, and IT professional services. Its offerings included proprietary application-development and business-process-integration platforms, selected packaged vertical software, outsourcing, and cloud-based services for digital transformation.[1]

Magic’s work evolved from its original metadata-based development platform into a broader portfolio for application creation, integration, data management and sector-specific operations. Thousands of enterprises used its products and services, which were marketed in more than 50 countries.[1] It was listed on Nasdaq from 1991 and on the Tel Aviv Stock Exchange from 2000 before being delisted following its merger with Matrix in 2026.[3]

Magic Software was organized and registered in Israel on February 10, 1983, and began operations in 1986. By February 1997, it developed, published and marketed “Magic,” a table-driven, cross-platform rapid application-development system for client, server and Internet-based solutions. Mashov Computers of Or Yehuda, which held a 51% stake, had spun the company off in 1991.[1][4]

The company’s early commercial activity included contracts to install its development tool in the operational systems of British newspaper and magazine distributors John Menzies and W.H. Smith News. The contracts were expected to contribute $500,000 to fourth-quarter revenue.[4] The following year, Magic signed an agreement worth more than $1.2 million to replace the computer systems of Club Mediterranee across 120 branches. The planned system covered guest registration, sports and entertainment activities, and accounting, and addressed the forthcoming Euro transition and Year 2000 problem.[5]

Magic’s business expanded through partnerships, acquisitions and shifts in product strategy. In 2006, it signed an original-equipment-manufacturer and global distribution agreement with IBM to integrate IBM’s DB2 Express database into a new version of its eDeveloper platform. The agreement formed part of a strategic emphasis on technology rather than applications; Magic also left the customer-relations-management sector.[6]

In 2008, chairman Guy Bernstein described a two-stage plan to streamline operations and return to profitability, then focus on the company’s core business. Magic had become profitable in 2007, but Bernstein said it had not done enough to rebuild its reputation or communicate the return-on-investment advantages of its products.[7] In 2011, Magic and its Italian distributor LabSo Informatica agreed with Deloitte in Italy that Deloitte would offer Magic’s iBOLT integration suite to customers. The tool was intended to simplify integration among enterprise systems used for functions such as resource planning, customer relations, logistics and supply chains.[8]

Acquisitions broadened Magic’s services and products. In 2015, it agreed to buy a 70% stake in an Israeli provider of software professional services for mainframes and complex large-scale environments, with an option to increase its holding to 100%. The operation employed 60 mainframe specialists and served financial institutions, large enterprises and government organizations; the acquisition was expected to complement Magic’s AppBuilder software.[9] In 2016, Magic announced the purchase of 60% of Roshtov Software Industries for $21 million in cash, valuing Roshtov at $35 million. Roshtov developed Clicks, a platform for designing and managing patient-file software for managed-care organizations and large healthcare providers; Magic had an option to buy the remaining shares under an agreed mechanism.[10]

In 2019, Magic completed its acquisition of San Francisco-based low-code startup PowPow. The companies did not disclose the purchase price, though a source cited by Calcalist estimated it at $15–20 million. Magic said the acquisition would help it offer a platform for transferring existing business processes to cross-platform web and mobile applications, and anticipated that the deal would become accretive to earnings within 18–24 months after investment in localization, sales and marketing.[11]

Magic xpa was the company’s proprietary low-code platform for developing and deploying client-server, mobile, web and enterprise applications. It evolved from Magic’s original metadata-based platform, previously known as uniPaaS. AppBuilder was a low-code, model-driven platform for mainframe-grade business applications, acquired from BluePhoenix Solutions in December 2011.[1]

Magic xpi, which evolved from the iBOLT product introduced in 2003, provided graphical, wizard-based tools for application integration, business-process management and service-oriented architecture. Magic also described SmartUX as a platform for cross-platform mobile business applications; it acquired SmartUX from PowWow in April 2019. FactoryEye, launched in May 2019, was a cloud-based data-management platform for manufacturers. Its Data Management and Analytics Platform offered cloud-based business intelligence and digital-transformation capabilities.[1]

Its packaged vertical software included Clicks for healthcare information management; Hermes Cargo for air-cargo and hub management; HR Pulse, a software-as-a-service human-capital-management platform; MBS Solution for television broadcast-channel management; Nativ for rehabilitation-center management; and Mobisale for field sales and distribution in consumer goods.[1]

Magic’s service business included IT and software outsourcing and professional services, alongside its proprietary platforms and packaged products. Demand in Israel and internationally—particularly in financial, high-tech and defense sectors—contributed to revenue growth, as did the full-year consolidation of KMT.[1]

Magic’s significance lay in both its software model and its place in the internationalization of Israel’s software industry. Its table-driven development system offered cross-platform client, server and Internet application creation by the 1990s.[4] Launch seminars for Magic 6 in 1995 attracted more than 6,000 participants across Europe, Asia, North America and the Middle East; teams using the platform also took the top five places at the Droege Developers Competition.[12]

Its capital-market history was also notable. Magic listed on Nasdaq in 1991 and became the first company to use the Tel Aviv Stock Exchange’s newly introduced dual-listing rules at the end of 2000.[3] By 2024, thousands of enterprises in about 50 countries used its products and services.[1] The 2025 merger proposal valued the combined Magic–Matrix company at about $2.1 billion and projected operations in approximately 50 countries, about 6,000 active clients and more than 15,000 employees.[13]

Before the merger, Magic operated internationally through sales and marketing offices or personnel in the United States, Japan, Germany, the United Kingdom, the Netherlands, France, Hungary, South Africa, India and Israel. The company reported strategic relationships with Oracle, SAP, Salesforce, Microsoft, AWS, Google Cloud, IBM and SugarCRM.[1] It also reported 24 regional offices and strategic alliances with IBM, Microsoft, Oracle, Salesforce and SAP.[14]

At the end of 2024, Magic reported 3,787 employees, up from 3,628 a year earlier. Its workforce included 1,654 employees in Israel, 1,387 in North America, 514 in Europe, 223 in Asia and 10 in South Africa. The company reported 224 research-and-development employees and $16.8 million in research-and-development investment for 2024.[1]

Magic reported 2024 revenue of $552.520 million, compared with $535.052 million in 2023 and $566.792 million in 2022. The 2024 total comprised $38.166 million from software sales, $34.774 million from maintenance and technical support, and $479.580 million from consulting services. Revenue by geography was $244.520 million in Israel, $229.076 million in the United States, $62.409 million in Europe, $12.673 million in Japan and $3.842 million in other markets.[1]

The company also reported a customer concentration-related decline in North American professional-services revenue: it fell by approximately $26.8 million after its largest revenue-generating customer suspended significant portions of its time-and-materials projects in the third quarter of 2023.[1] Before the merger, Magic’s November 2025 results release reported third-quarter revenue of $161.7 million, up 13.1% year over year. Operating income was $17.1 million, up 13.6%, and non-GAAP operating income was $19.9 million, up 8.1%.[15]

On March 11, 2025, Magic and Matrix IT announced a non-binding memorandum of understanding for a proposed reverse triangular merger. The proposed transaction valued the combined company at NIS 7.7 billion, or about $2.1 billion, and provided for Matrix to acquire all of Magic’s share capital. Magic shareholders were to receive Matrix shares and hold approximately 31.1% of the combined company, while existing Matrix shareholders would hold approximately 68.9%. The proposal remained subject to a definitive agreement and required approvals.[13]

The companies said the merger could expand Matrix’s geographic reach, particularly in the United States. The projected combined company was expected to serve about 6,000 active clients, employ more than 15,000 people and operate in approximately 50 countries.[13] Matrix and Magic were both controlled by Formula Systems, itself controlled by Poland’s Asseco.[16]

The merger was completed in February 2026. On February 24, Magic received the merger certificate from Israel’s Registrar of Companies, and all conditions precedent were satisfied. February 24 was identified as the legal closing date. Magic became a private company wholly owned by Matrix, with its shares to be delisted from Nasdaq and the Tel Aviv Stock Exchange. Eligible Magic shareholders were entitled to an aggregate of 28,861,564 Matrix ordinary shares, at an exchange ratio of 0.5878202 Matrix shares per Magic ordinary share.[2]

Magic publicly announced the merger’s official completion on March 2, 2026.[15] Available reports use several dates for distinct steps. February 24 was the legal closing date, while Globes said the Tel Aviv Stock Exchange delisting would become final on February 26.[3][2] A later Calcalist report used February 26 as the completion date, and Magic’s public announcement was dated March 2.[17][15] Magic was thereafter a wholly owned Matrix subsidiary rather than a separately traded company.[2]

Magic’s ordinary shares began trading on Nasdaq in 1991 and on the Tel Aviv Stock Exchange in 2000. Its dual listing on the Tel Aviv exchange was the first under newly introduced dual-listing rules. The Jewish Virtual Library’s January 2025 list of Israeli companies traded on Nasdaq included Magic under the symbol MGIC and identified its sector as Technology.[1][3][18]

Magic was registered in 1983 and began operations in 1986.[1] This distinction helps explain differing shorthand chronologies: a 2010 Globes article’s statement that it had been “in business for 27 years” points to 1983, while a 2026 Globes article used 1986 as the founding year.[3][19]