Magic Software CEO Guy Bernstein (from website)
Israel’s Magic Software Enterprises, a leading provider of low-code integration platforms, application development solutions, and IT consulting services, has signed a Memorandum of Understanding (MOU) for a potential merger with Matrix, a prominent IT service management firm.
Under the MOU, both companies have agreed to negotiate a definitive merger agreement. As part of the deal, Matrix will acquire 100% of Magic Software’s share capital through a reverse triangular merger, making Magic a privately owned subsidiary of Matrix. Magic shareholders will receive Matrix’s ordinary shares as compensation, with the exchange ratio determined by company valuations.
This merger is set to enhance both companies’ market presence and strengthen their technological capabilities in the IT services and software development sector. Stay tuned for updates on this significant development in Israel’s tech and IT industry.
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The combined entity’s aggregate market value is expected to be $2.1 billion (approximately 7.7 billion ILS), a valuation that would place it among the largest publicly traded IT services companies in the U.S and in Europe. Had the Companies already merged in 2024, the combined entity would have reported the following results in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board:
Magic believes that the contemplated merger represents a compelling strategic opportunity, strengthening Magic’s market position, expanding its capabilities, and enhancing value for its shareholders. The combination of Magic and Matrix is expected to generate significant benefits through increased scale, complementary geographic presence, and a broader product and service portfolio.
Founded in 2014, Matrix employs about 11,000 people and has a market cap of nearly $1.3 billion on the Tel Aviv Stock Exchange. The company boasts that it has a unit of technology leaders that assist startups & technology companies with complex development challenges.
The Matrix services include Matrix R&D Services – a “special elite squad of 60 talented and experienced developers experts and supreme tech-savvy leaders” (Architects, Software Engineers and more) from high-tech companies and startups – and Matrix R&D Services – provides “innovative tech solutions, tools, services and in-depth consultancy in” order to assist clients with complex and dynamic technological challenges, processes and tasks in order to fulfill their mission.
Founded in 1983, Magic Software provides “powerful and versatile” end-to-end, on-premises and cloud-based integration and low-code application development platforms. The company boasts over 30 years of experience, 24 regional offices, millions of installations worldwide, and strategic alliances with global IT leaders. It states that it enables its customers to “seamlessly adopt new technologies and maximize business opportunities.” Magic collaborates closely with its customers and thousands of business partners in 50 countries to accelerate their business performance.
