Magic Software Enterprises Ltd. (Nasdaq: MGIC; TASE: MGIC)has bought US company PowWow Inc., based in San Francisco. The deal is estimated to be in the range of $15-20 million. Acquisitions, usually fairly small, are an important part of the business strategy of Magic, which provides integration and development solutions. Its most recent acquisitions before the current one were of Israeli medical records software company Roshtov for $20.6 million (60%), and Futurewave Systems of the US for $3 million, in the years 2016-2017. At the end of 2018, Magic Software Enterprises had $114 million cash, after raising $35 million in the course of the year in a private placement to Israeli financial institutions and controlling shareholder Formula Systems.
PowWow has developed a low-code development platform called SmartUX, which, according to Magic's announcement, "is redefining digital transformation in the enterprise arena," and "enables organizations to simplify and transfer existing business processes over cross-platform web and mobile apps delivering new and intelligent 'enterprise to edge' experiences."
The announcement goes on to say, "PowWow’s SmartUX, launched in 2016, accelerates enterprise modernization by delivering powerful, modern native mobile and web apps faster and more economically. It allows the enterprise to rapidly transform any Windows or web application, workflow or data source into a full responsive and secure app that runs anywhere and on any device, with no disruption to the business."
Figures supplied by Magic show that the market for low-code development platforms is expected to grow to $21.2 billion by 2022, up from $3.8 billion in 2017, representing average annual growth of 41%. Low-code platforms enable software developers to create applications using graphical user interfaces rather than traditional computer programming.
According to PowWow's website, its founders are CEO Jonathan Kaplan and Andrew Cohen, and among its investors is Israeli crowdfunding platform OurCrowd.
Magic Software CEO Guy Bernstein said, “We are thrilled to welcome PowWow’s SmartUX to our product portfolio, and see this acquisition as an important step in Magic’s strategy and market positioning. By bringing together the strengths of the Magic’s Low Code paradigm and PowWow’s platform, Magic is able to offer to new and existing clients a strong portfolio of solutions and services that are well-tuned for the high demand of today’s digital workplace.”
Magic Software Enterprises is traded on Nasdaq and the Tel Aviv Stock Exchange at a market cap of $448 million. The company is due to release its first quarter financials this week. The analysts covering it expect quarterly revenue of $75.9 million and non-GAAP earnings per share of $0.14.
Published by Globes, Israel business news - en.globes.co.il - on May 13, 2019
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