BARGAIN hunters are on the lookout for acquisition opportunities in Scotland amid the fallout from the coronavirus but social distancing requirements will make it harder to get deals done, a prominent corporate financier has said.

Rod Mathers said Scotland may experience a lengthy slowdown in deal activity as many firms focus on survival in the face of the challenges posed by the spread of the virus and related lockdown measures.

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However, he said businesses that are in good financial shape may decide it makes sense to try to capitalise on the resulting fall in company valuations by acquiring firms that could help them boost their growth prospects.

“Mergers and acquisitions activity in the short to medium term will look very different to the last few years where we have enjoyed strong deal activity driven by good access to capital for organic and acquisition expansion,” said Mr Mathers, who is head of corporate finance at MHA Henderson Loggie chartered accountants.

He added: “The main drivers for deals in the Scottish SME market will include well capitalised acquirers looking for opportunities at low valuations and businesses looking to expand or improve their technology capability through acquisition rather than developing in-house.”

Potential sellers could include businesses that are in distress.

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Vendors who are in a stronger position may decide to sit tight. However, the owners of successful businesses who were already planning to sell up may be prepared to accept less than they could have got last year.

Shona Campbell, a corporate recovery specialist at MHA Henderson Loggie, said: “There are business owners looking for an exit, despite uncertainty around sales prices at the moment, and there are businesses in real distress where a sale may mean some value for the business owner and will secure the longer term employment for staff.”

Mr Mathers said firms in sectors such as healthcare and biotechnology could attract strong interest.

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Some private equity investors have raised lots of cash that they will want to use to buy firms after addressing any issues affecting their existing portfolios.

Mr Mathers highlighted the logistical challenges posed by the coronavirus.

Social distancing requirements and travel restrictions will mean deals will have to be done remotely. Buyers are likely to want to complete more in-depth due diligence into the potential impact of the crisis on bid targets.

Mr Mathers observed: “Technology is such that deals can still be done and the virtual world may actually become the norm. However during this transition, transactions will take longer.”