Jeffeies: 10 Buyout Targets To Own During The M&A Boom

In a new report, analysts at Jefferies discussed the current merger and acquisition (M&A) environment. The report included a breakdown of recent deals and a list of potential buyout targets that investors should consider.

Changing M&A philosophy
M&A activity has been steadily rising in recent years, and analysts note that it is now approaching pre-crisis highs.

However, analysts point out that the spirit of recent M&A activity is different than it was during past M&A booms. Instead of acquiring trophy assets, growth targets or sources of new revenue streams, analysts see many more companies acquiring targets with the intention of lowering operational costs.
“This is a significant change in M&A philosophy and is a recognition that global growth is unlikely to be so strong that companies need to increase capacity through greenfield expansion,” analysts explain.

Latest deals
Just last week, FedEx Corp FDX announced that it was buying TNT Express in an all-cash deal that will combine the third and fourth-largest European delivery services.
This latest deal comes on the heels of several other recent blockbusters. Royal Dutch Shell Plc (NYSE: RDS-A)(NYSE: RDS-B) made a 45 billion pound sterling offer to buy BG Group and potentially form the world’s largest LNG producer. Holcim and Lafarge have a 41 billion-euro deal on the table to potentially form the world’s largest cement company. Finally, Warren Buffett played a critical role in the recent headline-grabbing Heinz/Kraft Foods Group Inc KRFT deal.

Buyout targets
Jefferies recommends buying the following 10 potential M&A targets:
1. Arena Pharmaceuticals Inc ARNA
2. Lexicon Pharmaceuticals Inc LXRX
3. Seattle Genetics Inc SGEN
4. Sangamo Biosciences Inc SGMO
5. DHT Holdings Inc DHT
6. BioScrip Inc BIOS
7. OraSure Technologies Inc OSUR
8. Sonus Networks Inc SONS
9. NuVasive Inc NUVA
10. Allscripts Healthcare Solutions Inc MDRX