Tuesday June 12, 8:59 am Eastern Time

Magic Software Enterprises Signs Deal With adidas-Salomon AG's Canadian Subsidiary to Provide Tools and Training to Create New B2B Solution for IBM iSeries Platform

IRVINE, Calif.--(BUSINESS WIRE)--June 12, 2001- Magic Software Enterprises (Nasdaq:MGIC - news), a leading provider of state-of-the-art business solutions and applications development technology, today announced that it has signed a deal with adidas-Salomon AG's Canadian subsidiary ("adidas-Salomon Canada") to provide the company the tools and training to build its own custom B2B site for the IBM iSeries platform.

The new site, which will be built using Magic's award-winning proprietary application development technology, will extend adidas-Salomon Canada's current supply chain solution to allow customers access to sales, order status and payment information via the Web.

In addition, the site will provide links to other adidas-Salomon AG sites, such as www.taylormadegolf.com and www.salomon-sports.com.

Under the terms of the agreement, Magic developers will train adidas-Salomon Canada programmers on Magic's application development technology to enable them to independently create and deploy what will be one of the first business-to-business e-commerce sites for adidas-Salomon AG.

The solution, once developed, will run on the IBM iSeries and xSeries platforms utilizing an IBM DB2/400 database with IBM OS/400 and Microsoft Windows 2000 operating systems. adidas-Salomon Canada selected Magic because of its rapid development capabilities and strong training and customer support, as well as its tight interface to the IBM iSeries platform.

"The choice really came down to Magic or Lansa," said Paul Leone, director of IT/Logistics for adidas-Salomon Canada. "In the final analysis, however, it was Magic's productivity, and platform- and database-independence that made us realize Magic was the best solution for our very personalized needs."

adidas-Salomon AG is the second largest manufacturer of sporting goods worldwide, with a global estimated market share of about 15%. Its products, which include leading brands such as adidas, Salomon, Taylor-Made (golf), Mavic (cycling), Bonfire (winter sports) and Erima (swimming), are present in all major markets around the world. The company employs approximately 13,000 globally.

"We are extremely excited to have this opportunity to work with adidas-Salomon's people in Canada," said Menachem Hasfari, chief executive officer of Magic.

"Our iSeries offering, which was originally developed in cooperation with IBM's Rochester Labs, has stood the test of time as a unique development environment that allows the rapid creation and customization of large-scale and complex distributed applications, regardless of platform or database."

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