Magic Software Enterprises, a maker of tools for business software development and integration, has sold its Advanced Answers on Demand subsidiary to private equity firm Fortissimo Capital for $17 million in cash, the company said Monday.

The agreement calls for payment in two installments with the last coming by the end of January.

The transaction lets Advanced Answers on Demand, which makes software used by elderly care facilities like rehabilitation and retirement centers, continue to resell Magic Software products for three years.

Fortissimo, based in Rosh Haayin, Israel, was founded by Yuval Cohen, a former general partner at Jerusalem Venture Partners.

"Together with AOD's existing management team and solid customer base, we believe we can further enhance its leadership position in a large and growing market and capitalize on its unique business model," Mr. Cohen said in a statement.

Magic Software, whose partners include IBM and SAP, has its headquarters and research and development facilities in Israel and is listed on the Nasdaq Stock Market. In late morning trading, Magic shares fell $.06, or 3 percent, to $1.92.