The M&A market in Bulgaria in 2015

The M&A market in Bulgaria in 2015

Bulgarian financial advisory Synergy Group seeks buyers for four companies

Source: DealWatch

January 27, 2015 (08:22)

Jan 27, 2015 (DW) – Bulgarian financial advisory Synergy Group is seeking buyers for four local companies and has three buy-side mandates, its managing partner told DealWatch.

“Most of our mandates are on the sell-side and they are in the retail, telecom, distribution, machine building and food manufacturing sectors,” Kaloian Kirilov said in an interview.

Most of the sell-side mandates concern majority stakes or 100% stakes and the expected size of these deals would be between EUR 3mn and EUR 15mn. “Our mandates are different than the recent exits of multinationals like Delhaize and bauMax, which decided to exit Bulgaria regardless of the price. The mandates that we run do not involve exit at any price,” Kirilov explained.

Troubled Austrian do-it-yourself stores operator bauMax announced in September 2014 that it had sold its eight Bulgarian stores to local company Haedus in an all-share deal. Belgian international food retailer Delhaize Group completed the sale of its Bulgarian operations in June last year.

The value of neither deal has been disclosed.

On the buy-side, the company is looking to buy majority shares in the chemicals industry and transportation and logistics sectors, and the expected size of each of these deals would be below EUR 10mn. The potential buyers are both local and foreign investors.

The consultancy is also working on a number of projects in which Bulgarian food manufacturers and machine building companies are trying to enter the Chinese or the Turkish markets and later on these companies may also seek local joint venture partners or investors.

The M&A market in Bulgaria is rather inert and it is not going to change drastically this year compared to 2014, Kirilov said. “There will be again a number of big and interesting deals and it will be very interesting to see what will happen to the assets of Bulgarian Corporate Commercial Bank and its affiliate companies. Regarding the smaller deals, in the range from EUR 5mn to EUR 20mn, the most important factor will be the development of the European economy. The eurozone has recently slid into deflation and if that trend persists, investors will be more careful and conservative, which will reflect on their interest in investments in southeast Europe,” he explained. On the contrary, if the economic situation in the eurozone improves, the investors would be more aggressive. “It is not plausible to expect an investor from the Far East or the U.S. that has not been present so far on our market to come and invest in Bulgaria EUR 5-6mn right now,” Kirilov concluded.

Annie Tsoneva

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