With many companies’ stock values in flux due to the turmoil in the national economy, it’s arguable that every company is a potential buyout target. But a few have caught the attention of analysts, buyers and the Business Journal. The following brief capsules are a sampling of those companies with buzz, but in no way is it a complete list.
Allergan Inc.
The Irvine-based drug maker’s medical cosmetic products and drugs for an aging population may be enviable to some big competitors. Especially a company looking for a target with growth potential,such as Pfizer Inc., which analysts have suggested would be a good fit for Allergan. Although the cosmetic side,mainly Botox and Juvederm sales,of Allergan’s business has been taken down some by a weak economy, it’s expected to bounce back when things get better. The publicly traded company had a recent market value of nearly $12 billion.
Applied Medical Resources Corp.
The low-profile Rancho Santa Margarita company makes surgical instruments, including catheters, clamps, stents, guide wires and laparoscopic devices, and ranks No. 4 on the Business Journal’s list of medical device makers here. The company could be a takeover target as buyers look for steady revenue streams, which Applied’s devices,used in routine surgeries,could provide. Gained attention after tangling in court with Johnson & Johnson over antitrust issues.
Beckman Coulter Inc.
The Fullerton-based diagnostics maker is paying $800 million for a unit of Japan’s Olympus Corp. As the only major standalone medical diagnostic company, Beckman’s $3 billion annual revenue,80% of it from recurring sources,could be appealing to prospective buyers. It is also expanding into growing fields, including modern diagnostic technologies.
Edwards Lifesciences Corp.
The Irvine heart valve maker was fingered as a potential buyout target by Bloomberg last year after Johnson & Johnson announced plans to enter the market for a new type of heart valve that doesn’t require major surgery. At the time, Medtronic was also a potential suitor, but it since struck a deal to buy Irvine’s CoreValve Inc. as an entry into the market. Edwards’ less invasive Sapien heart valve is still seen as a favorite in the U.S. market since it already is in clinical trials here, which makes it an appealing target for buyers.
Epicor Software Corp.
It has long been speculated that someone would snatch this Irvine-based maker of business software. The publicly traded company had a recent market value of $170 million, an 80% discount from where it traded two years ago. The company says it wants to grow to $1 billion but hasn’t been able to get past the $500 million mark. It could need someone else to help it grow. It rebuffed a buyout offer last year from New York hedge fund Elliott Associates LP.
Pacific Sunwear of California Inc.
The apparel retailer, which sells surf-inspired clothes, has seen its shares fall 90% in the past year and is in an ongoing hostile takeover situation with Miami’s Adrenalina Group, which runs a handful of clothing stores. The smaller company has made several offers for Anaheim’s Pacific Sunwear, the most recent for $330 million in October. All were rejected by PacSun. But an ensuing board fight and ongoing retail troubles could bring the mall clothing store back to the bargaining table, some market watchers say.
Quest Software Inc.
Like Epicor, this perennial buyout target in Aliso Viejo makes business software. Quest itself bought startup MonoSphere Inc.’s Storage Horizon software early this year to integrate it with its own products, creating more business software offerings. For years, analysts have called Quest a takeover target for biggies including IBM Corp. and Microsoft Corp.
Specific Media Inc.
This fast growing Irvine-based company in the online advertising field is on the radar of investors. Having taken on $100 million in private equity more than a year ago, it’s well capitalized to buy smaller ad shops. Specific Media works with retail clients to create and track the efficiency of online ads, making it a company of interest to large Web players such as Google Inc.
Masimo Corp.
The Irvine medical device maker posted fourth-quarter profits that beat Wall Street expectations, a rarity in these economic times. Masimo, which makes patient monitoring devices and supplies, has a steady revenue stream that could attract investors looking for a safer buy. Its stock growth has tempered from its strong showing after a 2007 initial public offering, leaving enough room for potential buyers to have a negotiating platform.
TherOx Inc.
The Irvine-based company that develops technology to treat heart attacks made headlines last year as the only local company to file plans for an initial public offering, which initially planned to raise $100 million. Some analysts said at the time that the offering announcement could be a way to angle for potential suitors. With the recession, TherOx canceled its offering but could still be a target for buyers since it is well funded,it has raised more than $120 million in venture capital,and has a specific, in-demand product line.
WiSpry Inc.
The Irvine-based startup chipmaker makes products that extend the battery life of cell phones. The chips are controlled by software in the phone, making the company potentially intriguing to creators of cell phone technology, which has been faring better than many industries during the recession. WiSpry already has caught the attention of venture funds.
,Compiled by OCBJ staff
