Wednesday November 7, 8:32 am Eastern Time

Magic Software Enterprises Signs Deal With Menzies World Cargo to Deliver Comprehensive Air Cargo Management and Secured Tracking System

IRVINE, Calif.--(BUSINESS WIRE)--Nov. 7, 2001-- Magic Software Enterprises (Nasdaq:MGIC - news), a leading provider of state-of-the-art development technology and business solutions, today announced that its U.K. branch has signed a contract valued at more than $3.5 million with Menzies World Cargo (MWC) to deliver a comprehensive air cargo management and tracking system.

The customized solution, to be branded "Hermes" within MWC and to be based upon Magic eCargo(TM) (Magic's comprehensive air cargo management system), will improve MWC's cargo management control and secured tracking and verification capabilities.

Aready in use by Cargogate, the company that manages cargo handling for the Munich Airport, Magic eCargo will be implemented throughout MWC's organization with the assistance of NXGN, a Magic Solutions Partner that specializes in airfreight handling. The solution is expected to go live in the first quarter of 2002, although revenues from this project will start to be recognized as early as the fourth quarter of 2001.

MWC is the cargo handling and transport business arm of Menzies Aviation Group and a part of John Menzies plc. It is the U.K.'s fastest growing independent cargo handling company. Over the past several years, MWC has experienced substantial growth -- both organically and through acquisitions -- resulting in several different air cargo management systems being in place.

MWC approached Magic because it recognized a need to consolidate all of those legacy systems under a single new solution that would provide it a clear competitive advantage in the airfreight industry.

"We needed a system that would enable us to more effectively manage and control all aspects of our various air cargo operations, including the ability to absorb the additional tracking and administrative overhead we anticipate related to tightened security measures," said Des Vertannes, managing director of MWC. "Because of Magic eCargo's inherent flexibility and integration capabilities, we are able to protect our existing investments in complementary systems and get the new system up and running quickly. In addition, Magic eCargo will allow us to streamline every business process to achieve even greater levels of customer satisfaction and profitability."

Magic eCargo (http://www.magicsoftware.com/ecargo) is a comprehensive solution for cargo handling and inventory control that is designed to increase a company's productivity and efficiency. Operating on an open platform architecture, it can run on virtually all operating systems and can be rapidly integrated with existing applications. Its key features include:

• ULD (Unit Loading Device) build-up/break-down and inventory control
• Remote scanning/input at point of loading for automated build-up of flights/manifesting
• Comprehensive automated messaging to CARGO-IMP standards
• Customs clearance
• Weight and balance DCS interfacing
• Remote scanning/input at point of offloading/break bulk for verification of manifests
• Comprehensive scanning/verification of inbound, break bulk, etc.
• Comprehensive financial package for all aspects of charging, collecting fees, etc.

"We are very excited to have this opportunity to work with Menzies World Cargo, and to apply our world-class technology to solving its air cargo management and control issues," said Menachem Hasfari, chief executive officer of Magic. "The new solution will serve as strong testament to our considerable experience in developing complex business solutions and to our ability to work effectively with our Solutions Partners who have specific domain expertise to ensure our customers the maximum business benefit."

About Menzies World Cargo
MWC, a subsidiary of Menzies Aviation Group, was formed in July 2000 and is a leading independent cargo handling organization, handling more than 360,000 tons annually through its network of facilities in the U.K. It is the largest independent handling company at London Heathrow.

Menzies Aviation Group's acquisition program over the past two years has increased its global presence to 89 airports in 23 countries. For more information on MWC, visit the company's Web site at http://www.menziesworld.com.

About Magic Software Enterprises
Magic Software Enterprises, a member of the Formula Group (Nasdaq:FORTY - news), develops, markets and supports software development and deployment technology that enables enterprises to accelerate the process of building and deploying applications that can be rapidly customized and integrated with existing systems.

Magic technology, applications and professional services are available through a global network of subsidiaries, distributors and Magic solutions partners in approximately 50 countries. The company's North American subsidiary is located at 1642 Kaiser Avenue, Irvine, Calif., 92614, telephone 949/250-1718, fax 949/250-7404, http://www.magicsoftware.com.

The Formula Group is an international information technology company principally engaged, through its subsidiaries and affiliates, in providing software consulting services, developing proprietary software products and producing computer-based solutions.

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 here 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.

Contact:
Magic Software Enterprises, Irvine
Katharine Hanley, 949/250-1718 ext. 220
khanley@magicsoftware.com