Wednesday August 29, 9:08 am Eastern Time

Magic Subisidary, MRTI, Receives Purchase Order From Fiat to License MRTI's RentPro Vehicle Rental Management System Estimated At More Than $2 Million

IRVINE, Calif.--(BUSINESS WIRE)--Aug. 29, 2001--Magic Software Enterprises (Nasdaq:MGIC - news), a leading provider of state-of-the-art application development technology and business solutions, today announced that its subsidiary, Magic Rental Technologies Inc. (MRTI), has received a purchase order estimated to exceed $2 million from GM-Fiat Worldwide Purchasing Italia for Targa Rent ("Fiat").

Under the terms of the purchase order, Fiat is licensing RentPro(TM), MRTI's Magic-based vehicle rental management system, to implement throughout its operations in Europe and in three countries in Central and South America. Already, the system has been installed in Italy, where it is being used to facilitate car rentals and demo incentive programs, as well as replacement car programs for Fiat, Lancia and Alpha Romeo dealers.

RentPro
RentPro is MRTI's full-service, e-business solution for car and truck rental companies. It contains more than 2,000 programs, including more than 90% of all of the functions handled by car and truck rental companies with multiple facilities worldwide. Some of the functions handled by RentPro include purchase and sale of vehicles, reservations management, leasing and rental management, and fleet control and management.

It also can interface with virtually any accounting system. In addition, because RentPro is both a client/server and Web solution, companies with multiple locations are able to implement a client/server solution in their headquarters, while using low-cost Internet connections from remote sites.

"RentPro is one of several successful Magic-based vertical applications we are investing in as part of our overall applications strategy," said Menachem Hasfari, chief executive officer of Magic. "We are extremely pleased with the progress they have made in penetrating several major worldwide organizations."

RentPro also is multilingual, enabling the operator to communicate in his or her own language on the screen and in reports, while rental agreements and invoices are generated in the language of the customer. All translation is transparent to the customer, as well as to the user. In addition, because RentPro was built using Magic, it can operate on multiple platforms and integrate with most commercial databases.

"MRTI is excited about this opportunity to work with Fiat, and with the several other prestigious companies we recently have added to our client roster," said Stan Kalman, managing director of MRTI. "Without a doubt, RentPro is one of the most complete solutions for helping short- and long-term rental companies manage their rental operations to achieve improved levels of customer service and profitability."

In addition to Fiat, MRTI recently has closed deals with Opel Rent Holland, for its more than 180 dealers throughout the country; Debis Fleet Management, a Daimler-Chrysler company, for a pilot test in Poland; and the Athlon Group with installations in Germany, France and Holland.

Fiat
Fiat is one of the world's largest industrial groups, operating in 61 countries with 1,063 companies. The Fiat Group companies are organized into 10 operating sectors: automobiles, agriculture and construction equipment, commercial vehicles, metallurgical products, components, production systems, aviation, publishing and communications, insurance and services.

Through its Targa Services and other joint ventures, Fiat Auto offers its suppliers, dealers and customers an integrated system of mobility and insurance services. Targa Rent, a Targa Services company, specializes in replacement rentals, dealer demonstration management and regular short-term rentals.

In March, GM agreed to acquire 20% of Fiat Auto. In exchange, Fiat S.p.A. received a 5.1 percent stake in GM and the option to force GM to buy the remaining 80% of Fiat Auto within an approximate five-year period that begins in 2004.

About Magic Rental Technologies Inc.

Magic Rental Technologies is a 75%-owned subsidiary of Magic Software Enterprises. Current customers of MRTI include Hertz (Romania, Egypt, Dubai, Malta); Europcar (Israel, Greece); Alamo (Greece, Ireland, Mexico); National (Hungary, Greece); Budget (Finland, Denmark, Belgium, Luxembourg, Holland); and several large independent agencies throughout Europe.

MRTI's corporate headquarters are located at 13 Mascit Street, Herzlia, 46320, +972-9-9750897 (telephone), marketing@rental.co.il (e-mail). In addition, MRTI can be reached through any of Magic's branches worldwide.

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