Matrix and Magic merge to form $4 billion IT group
Executives describe the transaction as a “big bang” expected to accelerate acquisitions and future growth.
Software company Matrix is acquiring Magic, in what will become Israel’s largest IT merger and create one of the largest publicly traded technology companies in the sector.
Shareholders of both companies approved the merger, first revealed earlier this year by Calcalist, by a large majority. Upon completion of the deal, Magic will become a private company fully owned by Matrix and will be delisted. The combined company is expected to reach a valuation of more than NIS 13 billion (approximately $4 billion).
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Formula CEO Guy Bernstein (right) and Matrix CEO Moti Gutman.
(Photos: Boaz Offenheim, Idan Gross)
The deal will be executed as a reverse triangular merger, after which Matrix will hold 100% of Magic’s shares. Under the terms, existing Magic shareholders will hold 31.1% of the merged company, while Matrix shareholders will hold 68.9%. The consideration to Magic shareholders will be provided entirely in shares, with no cash component.
Completion of the merger remains subject to several conditions, including preliminary approval from the Tax Authority. The companies estimate that full completion, pending all regulatory and procedural approvals, is expected in the first quarter of 2026.
Matrix provides software solutions alongside hardware products, while Magic develops software tools for building enterprise applications. The combined company is expected to operate in 50 countries, serve more than 6,000 customers, and employ over 15,000 people. Magic’s international business, responsible for more than half of its revenue, is expected to significantly strengthen Matrix’s presence in the U.S. and other global markets.
Matrix is currently traded on the Tel Aviv Stock Exchange at a market value of NIS 9.2 billion ($2.85B), following a 74% rise since the beginning of the year. Magic is valued at NIS 4.1 billion ($1.27B), after an even more dramatic 96.3% increase this year.
Both companies are controlled by the Formula Group, itself controlled by Polish corporation Asseco. Formula is managed by Guy Bernstein, who also serves as CEO of Magic, while Matrix CEO Moti Gutman was a key force in driving the merger forward. Because Formula controls both companies, the deal is considered a related-party transaction. Each company established an independent board committee to evaluate the merger, but approval still required shareholder approval from both sides.
Following the vote, Gutman said, “For us, this merger constitutes a ‘big bang,’ expected to create a significant technological entity with a broad global presence.” He added that management views the merger as a foundation for continued growth and additional acquisitions in the future.
