From tiny acquisitions to massive conglomerate combinations, Wall Street's urge to merge remains strong. Some of these deals might generate sought-after synergy, but others could create what Peter Lynch called diworsification -- weakening a business's core competency by grafting on wildly unrelated subsidiaries. How can we tell the good deals from the dealbreakers?

Breaking down the buildup
To help, we'll turn to the 97,000 investors in Motley Fool CAPS. Combining two companies with high CAPS ratings should bode well for the new firm's future results, while a high-rated company that joins a lower-rated one may benefit one set of investors more than the other.

Despite troubles in the capital markets, the deals won't stop; they simply might involve more stock and less cash. Here's a handful of recently announced deals, and the ratings for each participating company on CAPS' five-star scale:

Acquirer

CAPS Rating

Target

CAPS Rating

Deal Price

Magic Hat Breweries

NR

Pyramid Breweries

NR

$25 million

Stone Energy

***

Bois d'Arc Energy (NYSE: BDE)

***

$1.8 billion

United Online (Nasdaq: UNTD)

***

FTD Group

***

$456 million

Genessee & Wyoming (NYSE: GWR)

*****

CAGY Industries

NR

$78.4 million

Honeywell (NYSE: HON)

****

MetroLogic Instruments

NR

$720 million

Mars

NR

Wm. Wrigley (NYSE: WWY)

*****

$23 billion

Triarc (NYSE: TRY)

**

Wendy's (NYSE: WEN)

**

$2.83 billion

CAPS ratings courtesy of Motley Fool CAPS; NR = not rated.

A bear of a time
Although there seem to be a greater number of deals pending, the first quarter's $736 billion is the actually the smallest global dollar value amount in six years. The total number of deals is up 14% to more than 9,100 -- those deals are just worth less overall. This is primarily because of the 41% decline in U.S. deal values, down to $203 billion, though both Russia (up 173% to $33 billion) and China (up 43% to $35 billion) have made up some of the slack.

A scanner darkly
With Wrigley's getting chewed up by the Mars Bar, and Wendy's finally gaining the stomach to accept the bid Arby's pulled from its 10-gallon hat, the diversified Honeywell's purchase of bar-code reader MetroLogic seems quaint in comparison.

Yet the $16 billion industry is positioned for double-digit growth. Honeywell has been gathering a number of names in this sector under its umbrella, aiming to become a preeminent operator. MetroLogic brings with it some $246 million in annual revenue and a broad array of laser, holographic, vision-based, and RFID technologies. It's a small acquisition for a company with more than $35 billion in annual revenue itself, but the deal is in line with Honeywell's plan to make smart acquisitions in growth fields. Those purchases have helped Honeywell gain some 10% in value over the past year.

The company's well-diversified nature attracts investors in economically uncertain times. CAPS player BudandMolly, who has outperformed more than 80% of the 100,000-plus investors in The Motley Fool's investor-intelligence community, thinks its efforts in other sectors also help position Honeywell to weather any storms in the long term:

It is in two strong growth areas, aerospace and energy control. In spite of oil prices, aerospace will grow significantly over the next 5 years along with third world growth and the demand for new, more energy efficient aircraft will continue. The need for companies to be more green and control energy costs will also drive above average growth in their controls segment.

A value-added offer
What's your take on these deals? At Motley Fool CAPS, your opinion as valuable as the pros'. Tell the CAPS community whether the urge to merge is good to go -- or whether you think it's better for the firms involved to remain independent.

Wrigley is a recommendation of Motley Fool Income Investor. Genessee & Wyoming is a Motley Fool Hidden Gems pick. You can buy into a free 30-day trial subscription to any of the Fool's investment services.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.