stocksMergers and acquisitions seem to be taking the business world by storm, with buyout and merger transactions -- which jumped some 23% in 2010 from 2009 -- up an additional 24% in just the first two months of this year.

According to analysts at mega investment bank Goldman Sachs (GS), stronger global economic growth and continued low interest rates, plus companies' attractive valuations and high cash hoards among U.S. corporations and private equity funds, have combined to create the perfect conditions for a flurry of M&A activity since October of 2009.

"We see continued upside to the M&A cycle and remain core buyers of the theme across our Americas coverage," Goldman Sachs analyst Robery Borouherdi notes in an M&A report released Friday.

Leveraged Buyouts to Keep Growing

Leveraged buyouts, or LBOs, appear to be one of the most attractive deals in the making. "With about $400 billion in unlevered private-equity cash and a favorable deployment backdrop, we expect the pace of LBO activity to continue," Boroujerdi says in a report.

All together, the companies that Goldman covers have cash balances that have cumulatively grown 50% since 2007. In the past two quarters alone, their gross balances have grown more than 10%.

The Goldman study lists companies that are potential buyout targets, as well as possible strategic acquirers, based -- in part -- on their profitability and cash stash. The study also highlights 33 stocks that could benefit from the mushrooming M&As.

Stocks Poised to Gain from M&A

The following companies top the list of companies with at least a 30% chance of getting involved in M&A activity, according to Goldman estimates:
  • Alexion Pharmaceuticals (ALXN), which develops drugs to treat autoimmune disorders, among other diseases, and is currently trading at $94 a share.
  • Cabot Oil & Gas (COG), a natural-gas exploration company now trading at $48 as share.
  • Mead Johnson Nutrition (MJN), which makes nutritional products for infants and children and trades at $55 per share
  • Abercrombie & Fitch (ANF), a major apparel retailer trading at $53 a share.
  • Huntington Bancshares (HBAN), which operates 600 Huntington National Bank branches and sells at about $7 a share.
  • Varian Semiconductor Equipment (VSEA), the world's largest designer and maker of ion-implantation equipment used to modify semiconductor wafers' electrical properties, currently trading at $44 a share.

Among the potential acquirers that Goldman Sachs lists are Google (GOOG), with net cash holdings of $31.5 billion at the end of 2010; Apple (AAPL), with $27 billion; Cisco Systems (CSC), with $25 billion; Intel (INTC), with $19 billion; Johnson & Johnson (JNJ), with $10.7 billion; Qualcomm (QCOM), with $10.5 billion; and Chevron (CVX), with $5.8 billion.

Private Equity Also Could Benefit

Several publicly traded private-equity firms also are well positioned to benefit from the M&A trend, including leveraged buyouts, the Goldman team says. These include:

1. Blackstone Group (BX), one of the world's largest private-equity firms and alternative-asset managers with nearly $100 billion of assets under management. With $16.5 billion in cash assets, Blackstone is Goldman's top listed top alternative asset manager and currently trades at $16.59 a share.

2. Kohlberg, Kravis & Roberts (KKR), a private-equity outfit specializing in acquisitions, leveraged buyouts, management takeovers and other investments, KKR has $13 billon of "dry powder" that it could set off to help finance deals and is now trading at $16.53 a share.

3. Evercore Partners (EVR), an investment boutique with a global franchise that provides advisory services for mergers and acquisitions, restructurings, divestitures and financing, and is currently trading at $30 a share.

Large institutional investors already have exposure to many of these companies for reasons other than their M&A appeal. But for investors seeking to catch potential M&A plays, these stocks could be a way to get into the game.


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Dereck

Major Fraud Alert


The entire Federal Banking System under FirstGov has been "Consumed" and "Levied" by way of a Maryland State Circuit/District Court Ruled “Appropriation and Garnishment” of all Future Earnings prior to and after 2004 against Bank Of America by way of the F.D.I.C. Regulations Prohibiting failing Banks from Merging with other failing Banks between the Dates of 08/04/08 and 10/09/09.

Bank of America violated the 21st Century Act: Final Amendments to Regulation CC Section: http://www.federalreserve.gov/boarddocs/press/bcreg/2004/20040726/attachment.pdf

seeking reimbursement of Credit, Loan, and Finance Balances as a "Bank Entity" and not a "Nonbank Consumer" as specified on Pages 85 and 86.

The person they sued through a LLC. Debt Collection Company and Law Firm was the "World Fortune Owner" who "Counterclaimed" and won.

Now all Contracts of any Corporations (Including Employment) under the "Controlling Interest" of any Investment Bank Worldwide are "Null and Void", and are also under the stipulated Rules and Regulations of an "Closely-held S Corporation rendering all Employed under Legal Actions against “Domination”, and also means that "No Corporation can hold Shares" officially making every Stock Exchange on the Planet a "Ponzi Scheme" by default.

Businesses owned by the States (Public Corporations) are being sold Stock Shares by Corporations also under the Federal Banking System in this Worldwide "Ponzi Scheme". The World Fortune Company Merrick Inc. Sweden is dissolving Millions and Billions of Dollars from "All Levels of Government"in the U.S. of Financing based upon Years of "negligent inaction" involving this case.

The Federal Government has already been forced to discontinue supplying the Financing States use to pay their debts, Persons in Government Offices may want to begin to take their jobs more seriously, these are different times from 10 Years ago and you will not be accepted civil servants here just because you say you are here to do the right thing.

May 29 2011 at 12:33 AM Report abuse rate up rate down Reply
k4jlp

Huge amounts of cash in the pockets of corporate America, none of which is for jobs creation or reduction of energy prices...what sheep the Americans are, as they get screwed deeper and deeper each passing day....

March 21 2011 at 7:06 AM Report abuse rate up rate down Reply
Beebie

I wouldn't trust Wall St. with a damn cent of mind. Heaven help those whose retirements (portfolios/investments) are tied up in Wall St. now. Hoped somebody was taught a little something from the thieving bast...s from a couple of yrs. ago. Probably make about as much sense to go to a damn casino for investment. The hell with Wall St. and those damn thieves that takes the little man's (middle-class) money.

March 20 2011 at 9:31 PM Report abuse rate up rate down Reply
1 reply to Beebie's comment
alpinecondenser

I'm constantly reading all of the negativity about Wall St. here on AOL and I truly don't understand why.
The market, since its inception, has always offered the highest rates of interest compared to bonds, cd's, savings, etc.

We're recently retired and in 2010 we made a return of 33.6%
YTD 2011 is 26.3%.

Granted it doesn't always go up, but once things average out, Stocks always seem to be the winner.

March 20 2011 at 11:22 PM Report abuse +2 rate up rate down Reply
gardeningatnite

What a cute little system the capitalist have....making money off of creating more 'too big to fail' conglomerates??? Monopolies that only reduce and restrict competition?.........The few, the proud, the wall streeters!

March 20 2011 at 5:26 PM Report abuse -2 rate up rate down Reply
llozano

As if most people had the time, money or expertise to invest in Wall Street directly. I assume this article is meant for investors and brokers not for the general public. Unless you are willing to gamble away your savings I would suggest you consult someone with expertise that can find a relatively save way to invest your money for retirement, don't go at it alone. Even then it is a gamble. Right now a safe place for your money is a money market, bonds or cds' otherwise buyer beware. If you are not willing to lose it don't go there.

March 20 2011 at 4:14 PM Report abuse -2 rate up rate down Reply
rotten rollin

Careful with Wall Street. Same crooks in charge as before/during the meltdown, and they've been trained to fail; all those bailouts rewarding them for failure, greed and bad/criminal behaviors. They're gonna do it again, watch and see. Don't get caught.

March 19 2011 at 10:42 PM Report abuse +2 rate up rate down Reply
footsiedown

On 2/19/11, Boehner squared up to Obama as the House voted for the $61 billion in cuts. This will allow the axe to fall on federal money for public broadcasting, environmental programs, Ocare and Planned Parenthood. "For the first time in many years, the people's house was allowed to work its will, and the result was one of the largest spending cuts in American history," said the rep House Speaker John Boehner. "We will not stop here in our efforts to cut spending, not when we are broke and Washington's spending binge is making it harder to create jobs."
The measures were staunchly opposed by dems in Congress, and the reps won by 235 to 192 votes. Between golf games and such, Obama said he would use his presidential veto unless some of the cuts were tempered.
The debate is part of a wider argument about the role of government in America. Government spending has become unsustainable.
Steny Hoyer (sr D-MD): "A lot of them (reps) don't know the ramifications in their own communities of what they are doing."
(refer to WI unions)
www.guardian.co.uk/world/2011/feb/20/republican-budge...

March 19 2011 at 4:53 PM Report abuse +6 rate up rate down Reply
3 replies to footsiedown's comment
Franco

When someone buys a new car, there are many unknown possible defects. A company can buy and resell, then another company can buy and then resell, all having an agenda, the bottom line. When it gets to the forth or fifth buyer, the aquired thing is artificially worth five times the price of the original price. Tell me if I'm wrong?

March 19 2011 at 3:00 PM Report abuse +1 rate up rate down Reply
mydollarnadream

Whoopi!

March 19 2011 at 12:56 PM Report abuse +1 rate up rate down Reply
inasctg56

Just reported by Daily Finance: "A key gauge of the health of the manufacturing sector, the index posted its fastest expansion since 1984." All thanks to an administration who is workng with our manufacturing sector and trading partners negotiating better trade deals as the $45 billion new agreement with China. Also South Korea and now South America. For every 10% gain in exports, we gain 7% job growth. We have had 19 months of manufacturing gains and exports have had double digit gains. The dems policies work for american workers. The gop's works for corporations to make record proftis overseas. End of story.

March 19 2011 at 12:43 PM Report abuse -4 rate up rate down Reply
3 replies to inasctg56's comment