BULGARIA Trends and Developments Contributed by: Venelin Dimitrov and Iva Georgieva, Komarevski Dimitrov & Partners
now as efficient as those in comparable EU markets, provided local expertise is engaged early. The legal and advisory ecosystem is capable Local Bulgarian M&A counsel and financial advisers are increasingly involved in cross-border and fund- driven deals. This has two important effects: • deal execution is more predictable – even in multi- jurisdictional contexts; and • international buyers feel confident in local capacity, especially in regulated sectors. Combined with consistent EU law harmonisation, this means that Bulgaria is becoming less of a “periph - eral” market and more of a legitimate EU mid-market destination. Outlook: What to Expect in the Next 12–24 Months The next two years are likely to be formative for the Bulgarian M&A market. Many of the positive funda - mentals are already in place, and as both local and international stakeholders adapt to the new environ - ment, several clear trends are expected to unfold. Sustained PE activity There is every indication that PE will continue to drive deal flow in Bulgaria: • funds that already made initial investments are now preparing for bolt-on acquisitions; • new funds with regional mandates are actively seeking platform targets; and • competitive tension among PE bidders is increas - ing, especially in sectors with limited high-quality targets. The authors also expect more Bulgarian businesses to approach PE proactively, viewing it as a viable alternative to strategic M&A or generational succes - sion. Founders are increasingly open to partial exits or co-ownership models that preserve control while enabling growth. More complex and cross-border deals As legal and financial infrastructure becomes more advanced, Bulgarian M&A is expected to feature:
• more multi-jurisdictional elements, particularly in IT, energy and fintech; • increased use of leverage in deals, especially with regional banks joining syndicates; • greater demand for post-closing integration plan - ning, driven by PE’s operational focus; and • a rise in vendor due diligence (VDD) packages as sellers aim to professionalise sale processes. Transaction documents and processes are likely to mirror those seen in Austria, Hungary or the Czech Republic – jurisdictions with more established M&A ecosystems but similar legal foundations. Growing market maturity Several indicators suggest that the Bulgarian M&A market is maturing quickly: • sellers are better prepared and advised; • processes are increasingly competitive and time - line-driven; and • buyers are more sophisticated in their approach to risk, valuation and integration. In parallel, the number of active financial advisers, M&A lawyers and tax consultants with deal experi - ence is steadily growing. This will improve execution quality and reduce friction in cross-border deals. Moreover, macro tailwinds – including adoption of the euro, EU funding, and regional economic recovery – are likely to support deal activity across industries. Conclusion: a Market Coming Into Its Own Bulgaria’s M&A market is leaving the periphery. While transaction volumes remain modest by Euro - pean standards, the quality, structure and strategic intent behind many deals has improved substantially over the past two years. PE is the defining factor in these changes – not only by increasing activity but by reshaping the culture of transactions in the country. Key takeaways include the following: • Bulgaria is increasingly seen as part of a regional strategy by PE funds, and not as an isolated or high-risk bet;
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