Thursday January 4, 9:09 am Eastern Time

Magic Software Enterprises Appoints New CEO of CoreTech

Magic Software Enterprises (Nasdaq: MGIC - news), a leading provider of state-of-the-art application development technology and business solutions, Thursday announced that it has appointed Rephael Inbar as chief executive officer of its newly acquired subsidiary, CoreTech Consulting Group (CoreTech).

CoreTech, a professional services company that specializes in helping companies implement successful e-business solutions, was acquired by Magic during the third quarter.

In his dual role as Chief Executive Officer of Magic's North American operations and CoreTech, Inbar will act as the lead architect for the integration effort aimed at merging both companies' operations and carving out a significant position for Magic in the North American e-marketplace.

The CoreTech Integration
During the third quarter of 2000, Magic acquired CoreTech as a means of adding depth to its professional services capabilities in North America. CoreTech, which has headquarters in Pennsylvania and maintains offices in several locations around the United States, combines solid business strategy planning, e-commerce technologies and creative design with traditional business systems to provide companies nationwide the optimum e-business solution for their markets. Its professional services capabilities, sales methodologies and experienced staff provide a strong complement to Magic's product offerings.

The integration effort, currently underway, is aimed at accomplishing the following:

• Consolidating the leadership of both companies to enable a single view of operations
• Capitalizing upon any and all economies of scale
• Leveraging both company's strengths and core competencies
• Creating a unique point of differentiation for the combined organizations

"I am very excited by this new challenge. The integration of Magic and CoreTech will enable us to leverage one another's core competencies and strengths to create a single and unique dominant force in the business solutions arena with direct and substantial benefits to our employees and customers," said Inbar.

Concurrent with the integration effort, Inbar expects both companies to maintain their focus on the day-to-day business activities of aggressively marketing and selling their products and services. The entire integration process is expected to last through the end of 2001.

As the newly appointed Chief Executive Officer of CoreTech, Inbar replaces David Moore, one of the original founders of CoreTech.

About CoreTech Consulting Group Inc.
CoreTech Consulting Group, a subsidiary of Magic Software Enterprises, is an e-business professional services firm that integrates solid business strategy and Internet technologies with traditional business systems and creative design to help companies implement successful e-business solutions.

CoreTech's clients include FORTUNE 2000 and middle-market companies, such as Smith Kline Beecham, Towers Perrin, Cellular One, Paine Webber, SunTrust, Credit Suisse, Pfizer, and many more. CoreTech, which has been named to the "Inc. 500" and Deloitte & Touche's "Fast 500," is based in suburban Philadelphia and has offices located around the United States. More information about CoreTech may be obtained by calling 800/220-3337 or visiting www.CoreTech.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 Ltd., Irvine
Katharine Hanley, 949/250-1718, ext. 220
khanley@magic-sw.com