Mergers and acquisitions play a crucial role in the business world. Companies that combine forces can expand their overall book of business, execute in new markets, or serve new customer groups where they previously had no presence.
The importance of M&A is even more pronounced in today's digital age. Popular websites, apps, or platforms can now serve hundreds of millions or even billions of users. Innovative technologies or new products can be infinitely scalable and quickly applied across an entire business. Sometimes, even very small teams who possess extremely promising IP or serve a strong product-market fit can be acquired by the right company for a huge premium.
Those premiums paid for acquisitions can also be extremely rewarding for investors. When a publicly-traded company gets acquired, its stock price can increase by 50%, 100%, or more in a single day on the news of the acquisition. And the companies who build their businesses around M&A activity -- such as Salesforce (NYSE: CRM), Middleby (Nasdaq: MIDD), or Berkshire Hathaway (NYSE: BRK-B) -- can methodically unlock hidden value that compounds their own investment returns for decades.
So where are the most lucrative potential acquisition targets today? Are there sectors of the market that are particularly appealing? Are there clever leadership teams leveraging new technologies that could fit perfectly in a more established company? Are there specific signs that investors should look for, which might suggest to us that a company is gearing up to make an acquisition...or to have itself be acquired?
In our July Team Podcast, our 7investing advisors share seven companies we believe could be prime acquisition targets right now.
We describe what makes these companies particularly appealing and who their most likely suitors could be. We even taking things one step further, and predict which of our previous 7investing recommendations these acquisitions would have the greatest impact on. If you'd like to see that report, as well as get immediate access to all 119 of our previous recommendations, use this link to sign up for 7investing today.
We'll also be providing a short text description below of each potential acquisition target we mentioned in the podcast. We'll update these recaps daily (adding one new writeup each day), so come back often to see our most updated descriptions!
Potential Acquisition #1: Alteryx (Nasdaq:AYX) -- Anirban Mahanti believes Alteryx's (Nasdaq: AYX) expertise in transforming raw data sets into insightful analytics positions it as an excellent acquisition target. Its stock price has languished on slowing growth, though Anirban believes this was largely due to the COVID pandemic and also a change in the company's revenue recognition policy. Alteryx was a leader in on-premise deployments, making it attractive for any company looking to expand its expertise to the cloud. He believes Salesforce, IBM, or Oracle could be the most likely suitors. Click here to read Anirban's Potential Acquisitions perspective!
Publicly-traded companies mentioned in this interview include Alteryx, IBM, and Salesforce. 7investing's advisors may have positions in the companies mentioned.

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