OR YEHUDA, ISRAEL (June 13, 2006) -- Magic Software Enterprises Ltd. (Nasdaq: MGIC), a leading provider of state-of-the-art business integration and development technology, announced that it has sold its CRM activity in Israel and abroad to eContact Software Ltd. The CRM system developed and marketed by Magic in recent years is a complex and unique system for managing customer relations and call centers, and is installed at hundreds of clients in Israel and throughout the world. eContact plans to make extensive modifications in the acquired product lines, including conversion to an Internet system incorporating Voice over IP. The transaction also includes incorporating Magic Software Enterprises' eService system, which specializes in providing service via the Internet. The eService system is designed for integration as the primary support component in eContact's future CRM system and, in particular, for pre/post-paid billing systems for Wi-Fi and Wi-Max systems.
eContact was established by a group of investors from North America and England, most of whom came from Bizware, which was acquired by Marconi-UK. The senior partners in eContact are experts in the fields of CRM, cellular and telephony. The company's main centers of operation are in Israel and North America. It will employ dozens of people in development, marketing, support and implementation of CRM systems based on development and integration tools such as Magic's eDeveloper and iBOLT.
According to Dory Asher, major shareholder in eContact: "The great technological flexibility and new product line capabilities of Magic Software enable the realization of eContact's business model, offering ground breaking CRM systems uniquely targeted at the SMB and SME niches based on Linux, Windows and i5 (AS400). These systems will provide an integrative and organization-wide response based on Composite Application and implementation of SOA methodology. In addition, eContact's range of CRM systems will come ready to link to Voice over IP-based telephony systems."
David Assia, Chairman and acting CEO of Magic Software Enterprises added: "This move is one further step in executing our refocusing strategy on our core products, with the added benefit of creating a strong new technology partnership and channel. I have no doubt that the talented team that leads eContact company and the substantial knowledge it has accumulated in the field of CRM, cellular and telephony will be a strong asset to our customer base and would enable the company to become an important and dominanting player in the world, and in Israel in particular. It is estimated that the market for such a product and the associated services is huge and this agreement will enable Magic to reap benefits from the eContact success."
About Magic Software Enterprises
Magic Software Enterprises, a subsidiary of Formula Systems (Nasdaq: FORTY), develops, markets and supports technology for development, deployment and integration of software, enabling enterprises to accelerate the process of constructing and deploying applications that can be rapidly customized and integrated with existing systems. Magic's technology, applications and business services are available to customers through a global network of subsidiaries, distributors and Magic Solutions Partners in 50 countries. For additional information, visit: http://www.magicsoftware.com/.
Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements that may involve a number of risks and uncertainties. Actual results may vary significantly based upon a number of factors including, but not limited to, risks in product and technology development, market acceptance of new products and continuing product conditions, both in Israel and abroad, release and sales of new products by strategic resellers and customers, and other risk factors detailed in the Company's most recent annual report and other filings with the Securities and Exchange Commission.
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