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> Decoding CEE M&A trends >>

Absolvo Consulting

发布日期: 2024年7月18日

Continuing our series, we’re back with more insights on how M&A works in the CEE region. Here is our next example:

Bulgarian software and IT services group Bianor Holding has recently finalized the acquisition of 100% of its local peer Digital Lights and 51% of software solutions provider Prime Holding. By consolidating and leveraging the synergies of these companies, Bianor establishes a new brand called Wiser Technology , a group they intend to position among Europe's leading high-tech software service providers.

The Buyer: Wiser (BUL:WISR) oversees high-tech companies offering specialized IT services, including mobile consultancy and software development. They create mobile applications, telecommunications solutions, and web-based products to optimize business processes. Bianor went public over a year ago, which was more recently followed by a €6.8M investment from BlackPeak Capital to support organic growth and accelerate development through mergers and acquisitions.

The Targets:

Digital Lights Ltd., a software company founded in 2018, specializes in Mobility, Business Applications, and Space solutions. The company tripled its revenue between 2019 and 2021 and now employs over 100 people.
Prime Holding - Part of Wiser , established in 2015, is a technology consulting company specializing in comprehensive software application development services. It employs over 200 people.

According to Kosta Yordanov, Executive Director of Bianor Holding: "The idea was to join forces with a few companies, to make a serious player, first at the regional and then at the European level. Because with size comes new business opportunities, and we can achieve a more serious business scale and challenge the big players in this sector."

It is most likely that M&A had been a longstanding part of the sellers' strategic plans. “Back in 2020, we recognized that consolidation was the best way to ensure the long-term well-being of companies in our industry that had reached a certain size,” said Georgi Sokolov, co-CEO of Prime Holding. “Since then, we’ve had dozens of meetings with potential strategic partners and investors, and we’ve been prudent about picking the right one. The significant synergies with Bianor and Digital Lights were obvious from our very first joint meeting.”

Our Remarks:

Strategic investors prefer majority stakes. A strategic investor typically seeks a 'controlling stake,' so they will acquire a majority. While it's often asked, acquiring a minority stake in these cases is quite uncommon.
Structure simplification. After the deal, each company will maintain independent operations while the group consolidates corporate functions like development, finance, marketing, and sales. This approach aims to reduce costs, exploit cost synergies and streamline the company's structure.
Size is key for entering Western markets. Wiser Technology plans to expand in Western Europe and the US through acquisitions and partnerships, aiming to enhance customer proximity and service offerings.
Private Equity in the background: The buyer has an investor on board - BlackPeak Capital. We often indicate that the arrival of an investor (especially PE) typically signals upcoming M&A activities to strengthen the company’s market position.

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Absolvo specializes in M&A and growth financing backed by close to 200 completed deals in the CEE region. If you consider a sale or a transaction with a private equity in the near future, we are dedicated to support you to achieve your goals and accelerate your success with our expertise and network.