The M&A Market in Bulgaria – an Internet Research

Market research on the Bulgarian M&A Market

Overview of the Bulgarian M&A Market

The M&A Market has been consistently in decline for the past years. 2014 saw a drop to 60 deals compared to 290 in 2013. Volume wise the drop was from about EUR 1.5B to EUR 650M.

Share of Sector in the Aggregate Value of M&A Transactions in Bulgaria in 2014

A M&A sector breakdown

A M&A sector breakdown by transaction volume in 2014

Another characteristic of the Bulgarian M&A market is its leading place in CEE of internal M&A deals – a total of 67% for 2014. What this signals is relative lack of international interest and also exit of some foreign investors, who are being replaced with Bulgarian ones. Further most Bulgarian investors are financial (58%) rather than strategic (9). Having said that, two of the Bulgarian M&A deals in 2014 are among the volume leaders in the CEE countries – Bulgartabac and Telerik (see below).

For the past five years (following the Global Crisis) the market was in decline and still is. The Bulgarian M&A market is still driven by the sellers (1). Unlike the last few years, however, in 2015 there is also some interest not only from local but also from foreign buyers. This means that, although not very active, the buyers are monitoring the Bulgarian market. This is an optimistic note, but only that. Compared to the USD 3.17T (some 32% growth from 2014/ M&A 2015 deals worldwide (Reuters), Bulgaria and CEE remain in the periphery of the frenzy.

The Ukrainian crisis is reported as a set-back factor restraining investments in Russia, Ukraine, former Soviet republics and CEE altogether (legal consultants CMS). Other barriers to international investors are “market interventions, over-regulation and bureaucracy have long troubled Europe, but their influence is more heavily felt in the eastern European countries like Slovakia, Romania and Bulgaria” (2). Other barriers for investors are the demographic trends, lack of skilled labor and education (2). However, the activity during end of 2014 and 2015 show that for good Bulgarian companies, it is always possible to find investors (2).

2015 started strong with its third quarter reporting the finalization of 16 M&A deals, with 6 in the pipeline (1). The total Q3 M&A disclosed volume is EUR 160M with Blizoo being the leader and the remaining being grouped as “small” (1). Of the latter worth mentioning is the financial investment in Waltopia and the exit of German giant Bosch from its renewable solar energy projects in Bulgaria.

Overall Bulgarian M&A market for 2015 is expected to be around EUR 600 M with some 30-40 considerable deals taking place (3). Anticipated M&A activity is in the banking sector, IT sector, office spaces, media sector, food industry, health and retail business.

Bulgarian companies, being a bit conservative, are still reluctant to seek expansion by M&A. Unfortunately they approach the M&A market not for growth, but when in trouble. It may be anticipated that in the near future, more will be seeking M&A growth consultancy. It is difficult to predict how many of these will be finalized successfully (10).

Players on the Bulgarian M&A Market


Big Ticket M&A

The big ticket M&A deals are normally supported by one of “the big five” audit firms, which all have Bulgarian offices or by local banks, most of which have their investment subsidiaries:


Small and Medium M&A

for Bulgaria the small and medium M&A deals are considered to be between EUR 10M and EUR 100M.


Investment Funds

Black Peak Capital

This is a mutual investment fund. It was one of the two selected to invest European Investment Fund (under the JEREMIE initiative) funds for the current program period. Together with Empower Capital (see next) they should invest EUR 25M, which should reach Bulgarian SME until year end 2015 (1). BlackPeak Capital controls EUR 10M. Empower Capital controls EUR 15M. Three of the investments in 2015 are theirs: Walltopia, International Power Supply and Bulpros Consulting.

Empower Capital

This is a mutual investment fund, controlling EUR 15M of the EIF (see above) to be invested in SME equity until end of 2015. Both Empower Capital and BlackPeak Capital are established and run by the entrepreneur Elvin Guri.

CEE Equity Partners

This is part of the China CEE Fund, which manages USD 435M. The fund was created by the China Exim Bank, partnering with other institutional investors. The fund is focused on investing in CEE. Walltopia is the first Bulgarian investment of the fund.

European Investment Fund

In for the period 2014-2020 Bulgarian Government has given EUR 120M to EIF which will manage them and disburse to local SME through local banks.


This is a combined initiative of the EU Commission and of the EIB for debt and equity support to SME and startups. Until year end 2014 the various funds under Jeremie had a combined portfolio of EUR 628M invested in 6247 Bulgarian companies.


This is a start-up investment fund operating in CEE including Bulgaria.

International M&A Consulting

There are not many international M&A companies with offices in Bulgaria. This is probably due to the low M&A activity. Here are some of the few:


They are the legal consultants for the top 3 2015 M&A deals: Blizoo (EUR 120M), KAI Group (EUR 195), Ameta (EUR 14M).

Baker Tilly
CMS Cameron McKenna
Balkan Advisory Company

This is a fully owned subsidiary of Europa Capital Management ( ) focused on the Balkan countries.

Local M&A Consulting

There seems to be an abundance of local M&A support companies. However, due to the relatively low M&A activity, usually M&A is far from being their core business.

Boyanov & Co.
Entrea Capital
GLO Capital
Synergy Group
Eurolex Bulgaria

This is the Bulgarian partner to M&A Worldwide

Mane Capital

This is the successor to KBC Securities Bulgaria

Georgi Popov & Co.
Bulgarian Business Consultants

Big Deals on the Bulgarian M&A Market in 2015

  1. Telerik
    Telerik was in the M&A news only one year earlier, when it acquired the Dutch company EQUATEC, in order to enhance its application analytics capacity (8). Then again in 2014 Telerik itself was the subject to an M&A deal. This is the biggest 2014 M&A deal which was finalized in the December 2014 and is the second largest in CEE. The Bulgarian software company Telerik was acquired by the US based Progress Software Corporation (NASDAQ PRGS) for USD 263M. The Wall Street Journal quotes officials from Progress Software who claim that Telerik’s income for the past 12 months exceed USD 60M. The merger of the two companies is supposed to ensure a competitive advantage in the cloud technologies usable by all kinds of devises (7).
  2. Blizoo
    The deal was made on 28.09.2015 and the merger date is announced for 01.10.2015. The official announced price for the acquisition of Blizoo is EUR 119.7M. This is the price paid from Mobiltel (one of the four mobile operators in Bulgaria owned currently by Telecom Austria) for internet and TV provider Blizoo. The seller is the Swedish based equity fund EQT V (4). Using this deal, Mtel is increasing its market share for fixed line internet and TV cover of Bulgaria. Blizoo has 373K fixed line subscribers and Mtel has 200K. This will make Mtel the second largest fixed TV provider and the leading internet provider in Bulgaria.
  3. Fadata
    The deal was finalized at the end of July 2015 after an year and a half in the making. The UK company Charles Taylor (31.25%) and the US investment fund Riverside Co. (68.75%) bought 80% of the shares of the Bulgarian company Fadata. Fadata has been producing software mainly for the insurance sector. Its main product INSIS is used in more than 30 countries. Although one of the leaders in Bulgaria, 85% of Fadata activity is for the international market. The amount of the deal was not disclosed, however market estimations show that it is around EUR 16.32M with Fadata total stock estimated at EUR 20M (5). The remaining 20% of stocks are held by current Bulgarian management and employees. The deal should open new markets for Fadata software, as well as increase orders for development in Bulgaria from its new owner. Advisors of Riverside Co on the deal have been CMS Warsaw and Sofia offices (11).
  4. KAI Group
    KAI Group was acquired by the American Mohawk Industries. The deal is estimated at EUR 195M and was finalized in March 2015. KAI Group holds 2 tile production plants in Bulgaria, and several linked with them companies in Bulgaria, Romania and Greece. The deal was anticipated, as the former owner American investment fund Advent, was holding the company for more than its standard 4-5 years. Consultants of KAI Group on the deal are CMS Cameron McKenna and Raiffeisen Investment. Mohawk Industries was consulted by Boyanov and Co (12).
  5. Ameta
    The biggest German poultry producer PHW has acquired joined control over three companies: Ameta Holding, Kamchia and Commercial Company. The current 100% owner is and Bulgarian America Foods Limited associated with the Bulgarian American Investment Fund. Details of the transaction were not disclosed. According to M&A consultants the evaluation of Ameta Holding is 5 times EBITDA, or EUR 28M, which means that the price for 50% of equity, acquired by PHW should be about EUR 14M. The deal is anticipated to foster growth by access to the PHW distribution network and full utilization of Ameta capacity. It is also anticipated that the deal is the first step to full exit of Bulgarian American Investment Fund from the Bulgarian market.
  6. Walltopia
    An minority equity investment (less than 20% of shares) of EUR 10M is split between financial investors as follows: BlackPeak Capital EUR – 3.1M, CEE Equity fund – EUR 4.5M, local private investors – EUR 2.4M. Walltopia is a Bulgarian company established in 1996 producing artificial climbing walls and other adrenaline equipment, exported around the world (USA market share above 50%). The company is growing dynamically with 2013 revenue/profit being EUR 13/2.5M, which grew for 2014 respectively to EUR 19/5M. The new funding is again aimed to finance growth, now on the Chinese market (13). The deal was consulted and organized by BlackPeak Capital. Founder and manager Ivailo Penchev is inclined to continue attracting institutional investors and gradually turning Walltopia into a public company.
  7. Bosch
    The exit of the German giant Bosch from the photovoltaic renewable energy projects is representative of the entry barriers for international investors. The overall political uncertainty and mixed “messages” stop investors. The renewable energy sector was one of the worst hit during the last year.
  8. International Power Supply (IPS)
    The deal was finalized only recently – on 23.10.2015.  BlackPeak Capital (see above) together with PostScriptum Ventures acquired a minority stake in power supply system manufacturer International Power Supply. Details of the equity sold and price of deal were not disclosed (16).
  9. Bulpros Consulting
    Bulpros is a five year old very dynamic IT BPO company. Bulpros proprietor software are Jabborate and Staffico. Their annual revenue growth has been 100% each year since set up. For 2014 revenue was EUR 6M and profit EUR 1M. In 2015 Bulpros sold 30% of stock to BlackPeak Capital and a German banker for EUR 2M. Bulpros plan to use this amount for organic growth and acquisition of smaller IT companies in the same sector.
  10. Galeria Varna Mall, Varna
    The deal is an exit of a foreign investor. This is the biggest real estate deal in 2015. The Mall of some 100.000 sq.m. area was sold to three Bulgarian investors, linked to City Clinic, who plan to turn it (or part of it) into a hospital (1).
  11. Strimon SPA Club Hotel, Kustendil
    The hotel was sold to the son of the former President of the Republic of Bulgaria – Parvanov and the daughter of the former Minister of Defense – Dobrev. The deal was finalized in the beginning of June. The reported price was EUR 100K for the purchase of 49% of the hotel stock, which has above EUR 1.5M of liabilities to banks. Currently the deal is being checked by tax authorities (14).
  12. Dimyat Hotel
    The bankrupt 5 star new hotel in sea resort Varna was sold by a judge executor in favor of creditor Raiffeisen Bank. The hotel has 15400 sq.m. area with 74 rooms, SPA center, restaurant and conference room. Sale procedure started in February 2014 (17). The initial offering was for about EUR 10M with no buyers. The price was reduced first to EUR 8M and then to EUR 6.5M, where the sale was made to Bulgarian company Keratech Inzenering in August 2015 (18).
  13. Post Bank acquisition of Alpha Bank
    Post Bank is the Bulgarian entity of the Greek Eurobank. Following the Greek crisis, this deal has been one of many expected consolidations in on the Bulgarian financial market. The deal was announced on 19.07.2015 but will be concluded upon Regulator (BNB, ECB, GNB, etc.) approval until year end 2015. Post Bank is acquiring the business of Alfpha bank. The amount of the deal has not been disclosed, however Reuters suspects that it is for one Euro. Post Bank, following the deal, is growing to become the fourth biggest bank in Bulgaria with 200 branches in Bulgaria and 3000 employees. Alpha Bank, following the deal, is strengthening its operation in Greece. The Alpha Bank Bulgarian branch had, following reconciliation in preparation for the deal, assets of BGN 1.5B (EUR 750M). The owner of Alpha Bank is the Greek State through its Helenic Financial Stability Fund. The latter is only a minority shareholder in Eurobank, who following a capital increase last year sold 65% of its stock to US and Canadian investment funds.

Sources of information sited in the paper:

  1. Capital newspaper, 21.10.2015 available in Bulgarian at
  2. European Attractiveness Survey 2015, Ernst & Young, 2015
  3. Julian Gikov – Managing Director for SEE, Raiffeisen Investment
  4. “The Official Price of Blizoo is EUR 119.7M”, Capital newspaper, 20.10.2015 available in Bulgarian at
  5. “A British Company and an American Fund Bought Fadata”, Capital newspaper, 27.07.2015, available in Bulgarian at
  6. “Post Bank is Buying the Bulgarian Branch of Alpha Bank”, Capital newspaper, 18.07.2015, available in Bulgarian at
  7. “Telerik Becomes Part of the American Progress Software”, website, 22.10.2014, available in Bulgarian at
  8. “Telerik Acquired Dutch Software Developper EQUATEC”, Enterprise, 07.03.2013, available in Bulgarian at
  9. “Slump in the M&A Deals at Home”, Mediapool, 30.03.2015, available in Bulgarian at
  10.  Angel Kalchev, Manager Deal Consultancy with EY, quoted in above article.
  11. “CMS successfully advises on the purchase of FADATA”, CMS corporate website, 24.07.2015, available in English at
  12. “KZK allows the American Mohawk Industries to acquire KAI group”, Capital newspaper, 15.03.2015, available in Bulgarian at
  13. “New adventure for Walltopia”, Capital newspaper, 07.08.2015, available in Bulgarian at
  14. “Tax authorities are checking acquisition of a hotel by the son of Parvanov”, Mediapool, 13.08.2015, available in Bulgarian at
  15. “Pioneer Investments and Santander Asset Management to join forces, creating a leading global asset manager”, Pioneer Investments web site, 23.04.2015, available in English at
  16. “Two funds buy minority stake in Bulgaria’s International Power Supply”, SeeNews web, 23.10.2015,  available in English at
  17. “Raiffeisen Bank is selling a bankrupt hotel in Varna”, Dnevnik newspaper, 04.02.2014, available in Bulgarian at
  18. “The Varna hotel Dimyat was sold for above BGN 13M”, Capital newspaper, 11.08.2015, available in Bulgarian at .


October 2015

The current market research on the Bulgarian M&A market is based on public information sources available on the internet and quoted at the end of the article.

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