Magic and Matrix set to merge in $2.2 billion deal
Israeli IT giants to unite under Formula Systems, pending shareholder approval.
Magic Software is expected to merge with Matrix in a deal that will create a single, larger company under the control of Formula Systems, which already holds a majority stake in both firms. The agreement is expected to be signed on Monday and will then require approval from shareholders.
The deal will likely involve a share swap and, once completed, will position the merged company as a significant player both in Israel and internationally.
Matrix, a leading Israeli IT services provider, is traded at a valuation of 5.7 billion shekels ($1.6 billion) and is managed by Moti Gutman. Magic Software, which specializes in software development tools, has a market capitalization of 2.2 billion shekels ($610 million). The newly merged company is expected to be valued at approximately $2.2 billion.
Founded in 2001, Matrix is Israel’s largest IT services company, employing 11,000 people. Over the years, it has completed more than 100 mergers and acquisitions of smaller companies, offering technological solutions across various sectors. In the first nine months of 2024, Matrix reported earnings of NIS 202 million ($55.8 million).
Magic Software, which develops and markets software tools for application development, operates in a complementary market to Matrix. The company reported earnings of NIS 26 million ($7.2 million) for the same period.
Formula Systems, the parent company of both firms, is controlled by Poland's Asseco Group. It holds a 46.7% stake in Magic and a 48.2% stake in Matrix. However, Formula alone cannot finalize the merger, as both companies have institutional and private shareholders who must approve the deal. Legal oversight is being handled by the Herzog Fox & Neeman law firm.
Matrix has not yet responded to inquiries regarding the deal.
