Formula today announced it is investing in Sapiens, together with venture capital fund Magnum. Formula will put $10 million into Sapiens, and Magnum will invest $5 million.
In exchange, Formula and Magnum will receive 25% of Sapiens’s equity, becoming the company’s major shareholders. The investment reflects a company value of $45 million before money for Sapiens, compared to a company value of $20 million prior to start of trading on Nasdaq.
Formula chairman Dan Goldstein will temporarily serve as acting CEO and president of Magic, which is controlled by Formula. Jack Dunietz and Israel Teiblum, who held these posts, resigned yesterday, following the publication of a Q4 profit warning.
Following the close of trading on Nasdaq yesterday, Magic published a profit warning concerning its Q4 sales and profit, citing the slowdown in the IT market. Magic said it was expecting a loss of $6 million on revenue of $23 million.
Magic’s shares yesterday closed at an all-year low of $2.5, having slid another 13% from its $33 peak this year. Formula’s share fell 6.4% yesterday.
Published by Israel's Business Arena on 27 December, 2000