Successful companies established years ago by Bulgarian entrepreneurs in the smaller cities outside Sofia are both witness to, and participant in, the development of the new Bulgarian economy. Almost every regional (and not only) city has such stories in which these companies independently went through successes and crises to grow without foreign investors and capital behind them.
One such story is that of Intelligent Security Systems from Vratsa, which since its foundation 30 years ago by local engineers has ceaselessly expanded its revenues and staff. A sure signal for further growth is the new investment of 8 million euros by the Bulgarian fund BlackPeak Capital, which enters the company with a share of 41.9%. With it, the founders leave the company as partners, but one of them remains in its management as a sign that the current development path of the manufacturer of electromechanical components continues.
The Commercial Register shows that earlier this month the fund bought out the shares of three co-founders, Ivo Varganov, Krasimir Nachev and Lyubomir Bonchev, and became the second shareholder in the company after Stark Invest Companies, which entered the Vratsa company as a financial investor three years ago, also buying some of the founders' shares. It holds the remaining 58.1%. Varganov remains a member of the board of directors and is still the technical director of Intelligent Security Systems. The company will be managed by Sashka Stanislavova and Georgi Atanasov, who will join the management team with the new investor. Atanasov is a well-known name in the engineering sector as a long-time manager at Festo Bulgaria.
"For us, as a fund that is not focused on just one industry, it was logical to choose manufacturing. And high-tech manufacturing such as EMS (Electronics Manufacturing Service - manufacturer of electronic modules and devices according to customer orders), which is definitely a very interesting segment ", Kiril Ivanov, investment director and partner at BlackPeak Capital says. He notes that another reason for the fund's decision is the desire of an increasing number of European companies to rely on local partners in Europe because of problems with global supply chains. "This guarantees them a more stable delivery time and greater quality control. And quality is one of the main advantages of Intelligent Security Systems, adds Ivanov.
It is quality that is the basis of the company's success since its beginning in 1994 in Vratsa. Intelligent Security Systems was founded by four young engineers from the then medical equipment plant in the city, where they were developing equipment. With the collapse of communism, the enterprise lost its markets and the young specialists decided to start their own business. "It was during this period that the banks began to develop. And we, as engineers, decided that we could work on the construction of special installations for this sector - fire protection and security systems. We have built a large part of these systems for the banks in Northwestern Bulgaria," Varganov says. Next, they decided to engage in the production of electronics. It started with just six people, making niche products in the field of security equipment for a Bulgarian company, as well as car alarm systems for another local client.
They gradually grew their business to reach 80 - 90 people in 2008. With the onset of the financial crisis, they understood it was important to diversify their activities and not be dependent on one client. At that time, they also entered into a joint venture with the Dutch Rommtech, which helped them implement even higher technologies in electronics production. They started to deal with SMT circuit board assembly. "This managed to raise us to a higher level. And in our segment you must have good technological security. With the entry into the European Union, we were able to actively benefit from various European grants, which gave us the opportunity to renew the technological park to levels, I would say, in the top 25% of companies in Europe," adds Varganov. Another benefit the Bulgarian company has is the imposed culture of electronics production, which has been built up over years.
Thanks to the good quality, they attracted more and more customers and thus managed to grow with each subsequent year. "We made a lot of effort - everything we earned, we invested in equipment and machines. Over the years, we have given ourselves extremely small dividends in order to have a resource for investments. This managed to raise us to a high level," says Varganov.
Now the company carries out the entire process of assembly, adjustment and mounting of boards, assembly of final modules and products, and manufactures plastic and metal components. Among its own products are LED lamps.
The next 30 years
Today, the business has a total of over 220 team members in the two companies - Intelligent Security Systems and Romtech-3 EU. The consolidated revenues of ISS for 2023 are about 28 million levs compared to 24.9 million levs for the previous year. BlackPeak is convinced that the company has an even better future.
"We believe that what Ivo Varganov has built over the years, with the additional expertise of Georgi Atanasov and, accordingly with our financial support, will lead to the expansion of production, further modernization, addition of new production facilities and will help the company continue to develops and grows at these rates", says Kiril Ivanov from BlackPeak.
According to him, the fact that the plant covers the entire production cycle is very advantageous. "Many companies in the industry simply "saturate" boards, but we produce the product that our client sells to its customers - electronics integrated in a housing. There is also a workshop for plastics and for metals, i.e. the circle is closed. And last but not least we are a fund that adheres to ESG principles. Thanks to the company's social policy, a large number of employees are long-term, the company has many awards as a good employer - more than 70% of the employees in the company are women," says Ivanov. He adds that with the investment they also want to further strengthen their ties with current customers.
Georgi Atanasov, who headed the activities of the German Festo in Bulgaria, will also help to continue to spur growth. The main task, he notes, will be the development of the management and engineering team in the company. "The idea is to focus on the future, to have professional management not only at the top level as managers, but also at middle management and expert level. We want to further train team leaders to give them the ability to make their own decisions and solve problems," Atanasov believes.
Atanasov adds that the plan is to expand the production base in the coming years to be able to accommodate more high-tech products with greater added value, as well as new customers. "As Ivo Varganov says, it is risky to depend on one branch or client. We want to have diversification and, if possible, look for the segments of the market that are the most relevant for a given period," he concludes.
Successful companies established years ago by Bulgarian entrepreneurs in the smaller cities outside Sofia are both witness to, and participant in, the development of the new Bulgarian economy. Almost every regional (and not only) city has such stories in which these companies independently went through successes and crises to grow without foreign investors and capital behind them.
One such story is that of Intelligent Security Systems from Vratsa, which since its foundation 30 years ago by local engineers has ceaselessly expanded its revenues and staff. A sure signal for further growth is the new investment of 8 million euros by the Bulgarian fund BlackPeak Capital, which enters the company with a share of 41.9%. With it, the founders leave the company as partners, but one of them remains in its management as a sign that the current development path of the manufacturer of electromechanical components continues.
