BULGARIA Trends and Developments Contributed by: Venelin Dimitrov and Iva Georgieva, Komarevski Dimitrov & Partners
Komarevski Dimitrov & Partners 4th Floor 19 George Washington Street 1000 Sofia Bulgaria Tel: +359 899 838 825 Email: office@kdp-law.com Web: kdp-law.com
Overview: A Market on the Rise The Bulgarian M&A market has entered a new phase of growth and maturation. In recent months, deal vol - ume has increased, investor interest has diversified, and the market overall has become more aligned with prevailing trends across the European mid-market space. While Bulgaria remains a small economy relative to other EU jurisdictions, its potential as a destination for value-driven acquisitions is gaining recognition. This is especially evident in sectors such as renewable energy, real estate, IT services and financial servic - es, where growth trajectories and operating margins remain strong, and where private equity (PE) funds in particular are showing sustained interest. Several key developments in Bulgaria’s political and economic environment have helped drive this momentum. Leading are the country’s accession to the Schengen Area (as of 1 January 2025) and the forthcoming introduction of the euro in January 2026. These steps towards deeper EU integration serve as important confidence signals for international buyers and funds. In addition to the above, local conditions remain favourable as well. Bulgaria has relatively low public debt, and a conservative fiscal framework. Collectively, these developments are contributing to investor comfort, attracting interest not only from the region but also from Western Europe and North Amer - ica. In this context, the M&A market – and in particular PE activity – in Bulgaria appear poised for continued activity in the medium-term.
PE: the Leading Force Behind Deal Flow Over the past 12 to 18 months, PE investors have become the most consistent and influential partici - pants in the Bulgarian M&A market. They are not only executing acquisitions but are also shaping the way deals are sourced, structured and negotiated. Most of the active players are small to mid-sized funds managing assets in the range of EUR100 million to EUR20 billion. Some have broader pan-European mandates, while others are focused specifically on South-East Europe or the broader Central and Eastern European (CEE) region. In either case, their presence is increasing both the quantity and the quality of deal making in Bulgaria. What is driving PE interest? Several factors make Bulgaria an appealing target for PE investment. • Attractive valuations: entry multiples remain lower than in more developed Western markets, offering potential for multiple expansion at exit. • Sectoral opportunities: key sectors – such as IT, real estate, renewables and financial services – offer scalable platforms with strong regional relevance. • Favourable currency conditions: the lev has been pegged to the euro for years, which reduces for - eign exchange (FX) risk. Effective from 1 January 2026, the euro will be an official currency in Bul - garia, making the country even more attractive for euro-denominated funds. • Regulatory alignment: Bulgaria may not be the frontrunner in transposing EU legal framework,
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