Magic Sells CRM Unit to eContact Software

By David Sims

TMCnet Contributing Editor

 

Magic Software Enterprises Ltd., a vendor of business integration and development technology, has announced that it has sold its CRM activity in Israel and abroad to eContact Software Ltd.

The CRM system developed and marketed by Israeli vendor Magic in recent years for managing customer relations and call centers is installed at “hundreds of clients in Israel and throughout the world,” according to Magic officials.

EContact plans to make extensive modifications in the acquired product lines, including conversion to an Internet system incorporating Voice over IP.

The transaction also includes incorporating Magic Software Enterprises' eService system, which specializes in providing service via the Internet. The eService system is designed for integration as the primary support component in eContact's future CRM system and, in particular, for pre/post-paid billing systems for Wi-Fi and Wi-Max systems.



According to Dory Asher, major shareholder in eContact, eContact wants to offer “CRM systems uniquely targeted at the SMB and SME niches based on Linux, Windows and i5 (AS400).”

Magic Software reported results for the quarter ended March 31, 2006, announcing that first quarter of 2006 results “indicate a reversal in the trend in software sales, with an incremental increase compared to the previous quarter.”

Total revenue for the first quarter ended March 31, 2006 was $15.27 million, an increase of 2% from the $15.02 million reported in the fourth quarter of 2005 and a 1% decrease compared to the $15.50 million reported in the first quarter of 2005.

At the time, company officials said “in accordance with its strategy to focus on its core business, Magic sold the rights to eContact, its Call Center Management application” during the quarter.

Software sales for the first quarter of 2006, at $4.85 million, increased by 30% from $3.73 million in the fourth quarter of 2005 and remained at the same level as in the first quarter of 2005. Application sales in the first quarter of 2006, at $1.41 million, decreased 30% from $2.00 million in the fourth quarter of 2005 and 36% from $2.21 million in the first quarter of 2005.

Revenue from maintenance and support, at $3.49 million, increased 4% from $3.37 million in the fourth quarter of 2005, and decreased 2% from $3.55 million in the first quarter of 2005.

Net loss for the first quarter of 2006 amounted to $169,000 (or $(0.01) per share) compared with a net loss of $1,991,000 (or $(0.06) per share) in the fourth quarter of 2005 and net income of $163,000 (or $0.01 per share) in the first quarter of 2005.

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David Sims is contributing editor for TMCnet. For more articles please visit David Sims’ columnist page.