There has been plenty to keep dealmakers busy in the technology sector so far this year.
Microsoft is acquiring LinkedIn for $26 billion, and computer-security company Symantec is buying Blue Coat Systems for about $4.65 billion in cash. Oracle agreed to buy cloud software provider Netsuite for $9.3 billion.
“Non-traditional buyers” are joining the fray, with companies like GM and Bed Bath and Beyond gobbling up startups now, according to Marc Andreessen, cofounder of venture capital firm Andreessen Horowitz. Private equity’s infatuation with tech has also spurred a flurry of deals this year.
Morgan Stanley’s equity strategists, led by Adam Parker, updated their ranking of companies the bank thinks could get acquired in the next 12 months, according to a proprietary model analyzing the companies’ finances.
Even though the overall pace of M&A activity slowed to 6.5% of public tech companies receiving a buyout offer last quarter, there are bright spots within the sector. The tech hardware and equipment industry group, for example, stood out with 10.6% of stocks getting an offer, according to the bank’s research.
Here’s a list of companies in the tech sector that Morgan Stanley thinks have a high probability of getting a buyout offer in the next 12 months.
1. Take-Two Interactive Software
- Phil McCarten/Reuters
What: A New York-based publisher, developer, and distributor of video games.
Market cap: $3.81 billion
Recent news: The firm faced a lawsuit from Lindsay Lohan, who alleged the company used her likeness in the game “Grand Theft Auto V” without permission. The case has been tossed out of court, according to Bloomberg News.
2. Cypress Semiconductor Corp.
- Kimberly White/Reuters
What: The San Jose-based company is one of the largest makers of SRAM, a memory chip that is used in consumer electronics.
Market cap: $3.8 billion
Recent news: The firm is pushing car makers to incorporate its chips, with applications including wireless radios and touch displays.
3. Brocade Communications Systems
- Robert Galbraith/Reuters
What: The San Jose-based firm supplies enterprise networking hardware.
Market cap: $3.62 billion
Recent news: In May, Brocade acquired wireless network equipment maker Ruckus Wireless Inc. for $1.5 billion. It’s Brocade’s latest efforts to tap into the growing Wi-Fi market.
4. Fitbit Inc.
What: The San Francisco-based company makes fitness wristbands, which keep track of users’steps, activity, sleep, and heart rate throughout the day.
Market cap: $3.28 billion
Recent news: Fitbit wants to broaden its appeal beyond the consumer wearables market. The company is pushing hard into healthcare, though it has faced criticism for the trackers’ “wildly inaccurate” heart-rate readings. Fitbit recently received a favorable ruling from the US International Trade Commission in response to accusations by competitor Jawbone for allegedly stealing its trade secrets.
5. Yelp Inc.
- Hollis Johnson
What: The San Francisco-based company operates an online platform that provides customer reviews.
Market cap: $2.93 billion
Recent news: Yelp just got out of a libel lawsuit brought by a small business owner who had received negative reviews on the service. It wasn’t held liable because users, and not the company, produced that content, the San Francisco Business Times reported.
6. FireEye Inc.
- Thomson Reuters
What: A cybersecurity firm based in Milpitas, California that detects advanced hacking attacks.
Market cap: $2.43 billion
Recent news: The firm hired Morgan Stanley to field dealmaking interest and was said to have turned down several takeover offers earlier this year, according to Bloomberg News.