Monday January 27, 2:49 pm ET

Magic Software Enterprises Announces Distribution Of Dividend To Shareholders

OR YEHUDA, Israel--(BUSINESS WIRE)--Jan. 27, 2003 - Magic Software Enterprises (Nasdaq:MGIC - NewsTASE:MGIC), a leading provider of state-of-the-art application development and integration technology, and business solutions today announced a dividend distribution to its shareholders. Following receipt of the approval from the District Court of Tel Aviv, the company will distribute $0.40 per ordinary share to its shareholders.

The total dividend, which will be distributed to its shareholders, will amount to $11,899,200. From the $0.40 per share dividend withholding tax at source of 25% will be withheld (except for Israeli companies). Accordingly, each holder of an ordinary share of MGIC stock (except for Israeli companies) will receive $0.30.

The record date for the distribution of the dividend will be Feb. 10, 2003, at 5 p.m. New York time and the payment date will be Feb. 24, 2003.

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 17310 Redhill Avenue #270, Irvine, CA 92614-5637, telephone 800/345-6244, 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 Ltd.
David Leichner, 949/250-1718 ext. 299
davidl@magicsoftware.com
or
Guy Bernstein, +972-3-538-9292
E-mail: gbernstein@magicsoftware.com