Magic Software downgraded to Market Perform from Outperform at William Blair

William Blair analyst Maggie Nolan last night downgraded Magic Software (MGIC) to Market Perform from Outperform without a price target after the company announced its intent to merge with Matrix I.T Ltd. The stock consideration to be paid is based on the relative valuations of both companies with the exchange ratio determined to be 31.125% and 68.875%, meaning Magic shareholders will hold 31.125% of outstanding shares of Matrix and existing Matrix shareholders will hold 68.875% of outstanding shares immediately following the merger, the analyst tells investors in a research note.