With the stock market tipping the scales at new highs, there has been a veritable smorgasbord of merger and acquisition activity. In just the past few weeks we’ve seen the largest leveraged buyout in the technology sector since the recession with Silver Lake Partners and Michael Dell‘s ongoing battle to take PC maker Dell private for $24.4 billion. In the airline sector we had the drawn-out merger announcement between US Airways and American Airlines parent AMR, which is aimed at reducing flight overlap, trimming costs, and boosting operating efficiency.

But no deal stands out more notably to me than the $23.2 billion purchase of Heinz by the consortium of Berkshire Hathaway and Brazil‘s 3G Capital Partners. Heinz is a household condiment name — known best for its ketchups — and it just makes money! Businesses that “just make money” might be a little boring from a growth perspective, but they generally offer solid long-term prospects, have few fluctuations when the economy ebbs and flows, and are often on the radar of conglomerates looking to add a top-notch brand-name to their portfolio.

Today I want to examine three brand-name consumer-goods companies that I think could be next up on the auction block. Let’s make this clear: These are my best guesses, and I have nothing more to substantiate these claims beyond what I’m stating here, so don’t go clicking the “buy” button tomorrow just because I said I think it’s a buyout candidate without first digging deep into these companies for yourselves. Consider this the introduction to your homework!

Energizer Holdings
The bunny hasn’t had an easy go of things since the recession hit, as Energizer announced in November that it was slashing close to 10% of its 16,000 global workforce to save $200 million annually. But as the commercials always state, even if the times get tough, that little bunny just keeps going, and going, and going.

Energizer, which makes various sized batteries and razors for personal use, plans to use its $200 million in savings by investing a quarter of it in long-term growth initiatives, while also streamlining its current operations. In other words, competition in batteries has increased from Spectrum Holdings with its Rayovac brand, and the battle for razor supremacy is heating up between it and Procter & Gamble, which owns Gillette. Energizer has responded with solid cost-reducing and efficiency-improving measures that should continue to drive its cash flow regardless of the economic conditions.

Source: Morningstar, Figures in millions.

Why I think Energizer makes a compelling takeover candidate is pretty simple. First, it’s a global brand with sales in 50 countries. The further the reach of your product, the less fluctuation in sales if a region falters. Second, it sells products with inelastic prices and steady demand. You can shop around all you want, but the price of batteries isn’t going to change much, if at all, from one place to the next …read more
Source: FULL ARTICLE at DailyFinance