By acquiring the fitness locations under the Flais brand, the Poland based Benefit Systems expands the fitness business of its Bulgarian arm Next Level Fitness in Sofia.

The acquisition of Flais grid of fitness locations triggered the first definitions and reviews by the Bulgarian competition protection watchdog of the local markets for “sports and fitness services” and its vertically integrated stream of enabling the access to “social benefits for employees”.

The key conclusion at which the competition protection regulator arrives is that the market of sports and fitness services, including also the recreational services for good physical condition, is fragmented and hence competitive. In addition, the Bulgarian market is characterized with well-developed parallel grid of fitness and sports locations run by other market participants.

The vertical market of social benefits for employees is also found to be effectively competitive. The Competition Protection Commission considers that the competition related risk is rather low as the competitive social benefits access card product is found to be rendering efficient countervailing market power.

The concentration clearance decision seems reasonable and well founded. This milestone event demonstrates that the market is susceptible to further growth in scope, volume and quality of services.

The decision also seems consistent in upholding the state policy of prioritizing the physical and mental fitness of the population through a healthy lifestyle.

We note our advice and assistance for the buyer throughout the M&A process.