Announcement of proposed private placement of Ordinary Shares to several leading Israeli institutional investors and Formula Systems (1985) Ltd.

Tuesday, May 29, 2018, Or Yehuda, Israel

 

Magic Software Enterprises Ltd. (NASDAQ and TASE: MGIC), a global provider of end-to-end integration and application development platforms and IT consulting servicesannounced today that its board of directors has approved a proposed private placement of 3,150,559 Ordinary Shares of the Company to several leading Israeli institutional investors and 1,117,734 Ordinary Shares of the Company to its principal shareholder, Formula Systems (1985) Ltd., under the same terms.

The Company’s gross proceeds from the offering are expected to be $35.0 million based on a price of $8.20 per share. The Company intends to use the net proceeds of the offering to support its continued organic growth momentum and funding of potential acquisitions.

The closing is expected to take place after receipt of the requisite regulatory approvals, which are expected to be obtained during June 2018. Formula Systems will, following completion of this offering, own approximately 45.3% of our Ordinary Shares.

Barak Capital Underwriting Ltd. acted as the exclusive placement agent for the offering.

Guy Bernstein, Chief Executive Officer of Magic Software Enterprises, said: “We are pleased to announce the successful private placement of our shares, reflecting our investors’ boosted confidence in Magic Software, fueled by the Company’s continued double-digit growth momentum over the past years.This substantial influx of funds coupled with Magic Software’s existing strong financial position will enable the Company to further enhance its leading-edge solutions for enterprises’ digital transformations, and to ramp up its merger and acquisitions efforts.”


This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities.


About Magic Software

Magic Software Enterprises (NASDAQ and TASE: MGIC) is a global provider of mobile and cloud-enabled application and business integration platforms. For more information, visit www.magicsoftware.com.

For more information, visit www.magicsoftware.com.

Forward Looking Statements

Some of the statements in this press release may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the United States Private Securities Litigation Reform Act of 1995. Words such as “will,” “expects,” “believes” and similar expressions are used to identify these forward-looking statements (although not all forward-looking statements include such words). These forward-looking statements, which may include, without limitation, projections regarding our future performance and financial condition, are made on the basis of management’s current views and assumptions with respect to future events. Any forward-looking statement is not a guarantee of future performance and actual results could differ materially from those contained in the forward-looking statement. These statements speak only as of the date they were made, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We operate in a changing environment. New risks emerge from time to time and it is not possible for us to predict all risks that may affect us. For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to the Risk Factors detailed in our Annual Report on Form 20-F for the year ended December 31, 2017 and subsequent reports and filings made from time to time with the Securities and Exchange Commission.

For further information contact:

Amit Birk | VP M&A and General Counsel 

Magic Software Enterprises

ir@magicsoftware.com

 

Except for any historical information contained herein, matters discussed in this press release might include forward-looking statements that involve a number of risks and uncertainties. Regarding any financial statements, actual results might 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 locally and abroad, release and sales of new products by strategic resellers and customers, and other risk factors detailed in Magic's most recent annual report and other filings with the Securities and Exchange Commission.

Magic has made every effort to ensure that the information contained in this press release is accurate; however, there are no representations or warranties regarding this information, including warranties of merchantability or fitness for a particular purpose. Magic assumes no responsibility for errors or omissions that may occur in this press release.

Magic is a registered trademark of Magic Software Enterprises Ltd. All other product and company names mentioned herein are for identification purposes only and are the property of, and might be trademarks of, their respective owners.