Who Owns Magic Software Company?

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Who Owns Magic Software Enterprises Ltd.?

Magic Software Enterprises Ltd., a global provider of software solutions, is undergoing a significant ownership shift with a proposed merger announced in March 2025. This development highlights the ever-changing corporate landscape and its impact on a company's strategic path and accountability.

Founded in 1983, the company has a rich history of innovation, including the development of its flagship application generator. Its evolution from a private venture to a publicly traded entity on NASDAQ and the Tel Aviv Stock Exchange reflects its growth and market presence.

Who owns Magic Software Enterprises Ltd.?

Magic Software Enterprises Ltd. is a publicly traded company, with its shares listed on NASDAQ under the ticker MGIC and on the Tel Aviv Stock Exchange, also as TASE: MGIC. For the full year 2024, the company reported revenues of $552.5 million, and its revenue guidance for 2025 is projected to be between $600 million and $610 million. The current ownership structure is primarily influenced by its controlling shareholder, Formula Systems (1985) Ltd., alongside a broad base of institutional and individual investors. The company's journey includes the development of its foundational product, which is detailed further in a Magic Software PESTEL Analysis.

Magic Software Enterprises was founded in 1983 by David Assia and Yaki Dunietz. Emerging as a spin-off from 'Mashov Computers,' an Israeli firm specializing in microcomputer business solutions, the company was initially named 'Mashov Software Export (MSE).' Assia and Dunietz spearheaded the development and international export of an application generator called 'Magic,' which featured a pioneering metadata-driven programming approach for instantaneous debugging.

Founding Vision

David Assia and Yaki Dunietz established the company with a clear objective: to develop and export a revolutionary application generator internationally.

Technological Innovation

The core innovation was a metadata-driven programming approach that eliminated compilation and linking, enabling rapid debugging.

Origins

The company originated as a spin-off from 'Mashov Computers,' an Israeli entity focused on microcomputer business solutions.

Initial Naming

Initially, the company was known as 'Mashov Software Export (MSE)' before evolving into its current identity.

Early Ownership Structure

While precise initial equity splits are not public, the founders held significant foundational control due to their role in the spin-off.

External Investment

Details on early angel investors beyond the initial Mashov Computers context are not extensively documented in public records.

The early ownership of Magic Software Enterprises was primarily vested in its founders, David Assia and Yaki Dunietz. As the architects of the company's vision and technological advancements, their control was instrumental in shaping its initial trajectory. Although specific shareholding percentages from the company's inception are not publicly disclosed, their positions as founders of a spin-off from 'Mashov Computers' strongly suggest a substantial foundational stake. This early distribution of control was intrinsically linked to the founders' commitment to developing a highly efficient and adaptable software development platform, laying the groundwork for its subsequent growth and eventual public offering. Understanding this early ownership is key to grasping the company's foundational principles and its approach to business strategy, as detailed in the Marketing Strategy of Magic Software.

Key Aspects of Early Ownership

The initial ownership structure was characterized by the founders' significant influence and control, driving the company's innovative direction.

• Founders: David Assia and Yaki Dunietz
• Origin: Spin-off from Mashov Computers
• Initial Focus: Development and export of the 'Magic' application generator
• Key Innovation: Metadata-driven programming for rapid debugging
• Early Investors: Not explicitly detailed in public records beyond the originating company

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Magic Software Enterprises' ownership journey began with its pioneering NASDAQ listing in 1991, marking a significant step for Israeli tech companies. A major shift occurred in 1998 when the Formula Group, under Dan Goldstein's leadership, acquired the company, establishing a controlling stake that continues to shape its strategic path.

Formula Systems (1985) Ltd. remains the primary controlling shareholder of Magic Software Enterprises, a position that has historically ensured consistent governance and strategic alignment across the organization. While institutional ownership has seen some movement, increasing from 14.25% in February 2025 to 20.36% in March 2025 before settling at 20.12% in August 2025, the overarching influence of Formula Systems provides a stable foundation for the company's direction.

Understanding Magic Software's Stakeholders

The corporate structure of Magic Software Enterprises is characterized by a dominant controlling shareholder and a growing presence of institutional investors. This dynamic influences the company's strategic decisions and market perception.

• Formula Systems (1985) Ltd. is the controlling shareholder.
• Insider ownership represents a significant portion of the company's shares.
• Key institutional investors include Clal Insurance and Harel Insurance.
• The company's history includes a pivotal acquisition by the Formula Group.
• Understanding Mission, Vision & Core Values of Magic Software provides context for its strategic direction.

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The current Board of Directors for Magic Software Enterprises Ltd. is composed of Naamit Solomon, who serves as Chairperson, alongside directors Ron Ettlinger, Sagi Schliesser, Avi Zakay, Guy Bernstein, and Sami Totah. Guy Bernstein holds a significant position, acting as both the Chief Executive Officer of Magic Software Enterprises and a Board Member. His leadership extends to being the CEO of the parent company, Formula Systems, and chairman for other subsidiaries within the Formula Systems group, ensuring strategic alignment.

The voting power within Magic Software Enterprises is predominantly held by its controlling shareholder, Formula Systems (1985) Ltd. This control is exercised through its substantial ownership stake, rather than through differential voting rights or dual-class share structures. Each ordinary share typically carries one vote, meaning Formula Systems' significant shareholding directly translates into its ability to influence key corporate decisions, including the appointment of board members and the direction of strategic initiatives. While there haven't been recent public proxy contests, the influence of Formula Systems is a defining characteristic of the company's governance and operational focus. Understanding this ownership structure is key to grasping the overall Magic Software company background and its major shareholders.

Understanding Magic Software's Ownership Structure

Magic Software Enterprises' corporate structure is significantly shaped by its parent company, Formula Systems. This relationship dictates much of the company's strategic direction and governance.

• Formula Systems (1985) Ltd. is the controlling shareholder.
• The board of directors includes individuals with overlapping roles in Formula Systems.
• Voting power is concentrated due to Formula Systems' majority ownership.
• This structure ensures close alignment with the parent company's objectives.

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What Recent Changes Have Shaped Magic Software’s Ownership Landscape?

The ownership landscape for Magic Software Enterprises is undergoing a significant transformation, primarily driven by a proposed merger with Matrix I.T Ltd. This development is set to redefine the company's public trading status and shareholder composition.

Transaction	Announced Date	Key Terms	Projected Combined Entity Ownership
Proposed Merger with Matrix I.T Ltd.	March 10, 2025	Reverse triangular merger; Magic becomes wholly-owned subsidiary of Matrix.	Matrix Shareholders: 68.875% Magic Shareholders: 31.125%

This proposed merger, announced on March 10, 2025, is a pivotal event that will fundamentally alter Magic Software's ownership structure. Upon completion, Magic Software's ordinary shares are expected to be delisted from both the TASE and NASDAQ. The combined entity is anticipated to achieve an aggregate market value of approximately $2.1 billion, with projected annual revenues also around $2.1 billion, positioning it as a major player in the IT services sector across the U.S. and Europe. This move aligns with a broader industry trend of consolidation, aiming to create larger, more robust companies with diversified service offerings and expanded global reach.

Merger Impact on Trading

The merger with Matrix I.T Ltd. will lead to the delisting of Magic Software's shares from public exchanges. This signifies a shift from its current publicly traded status.

Shareholder Distribution Post-Merger

Following the transaction, Matrix shareholders are expected to hold a majority stake of 68.875% in the combined company. Magic Software shareholders will own the remaining 31.125%.

Strategic Acquisitions and Growth

Beyond the merger, Magic Software continues its growth trajectory through strategic acquisitions, such as the integration of Axiom Manufacturing Systems in July 2025. This acquisition aims to bolster its digital transformation capabilities within the manufacturing sector.

Financial Performance and Outlook

The company reported robust financial results for the second quarter of 2025, with revenues reaching $151.6 million, an 11.3% increase year-over-year. This performance led to an upward revision of its full-year 2025 revenue guidance to between $600 million and $610 million.

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