From tiny acquisitions to massive conglomerate combinations, Wall Street's urge to merge remains strong. How can we tell the dealmakers from the deal breakers?

Breaking down the buildup
To help, we'll turn to the 130,000-plus investors in Motley Fool CAPS. A combination of 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. Or, like this week, they might slow to a trickle. Here are a handful of recently announced deals, and the ratings for each participating company on CAPS' five-star scale:

Acquirer

CAPS Rating
(5 max)

Target

CAPS Rating
(5 max)

Deal Price

Acuity Brands

***

Sensor Switch

NR

$205 million

Valero (NYSE:VLO)

*****

Assets of VeraSun Energy

NR

$477 million

National Semiconductor

**

Act Solar

NR

undisclosed

Cintas (NASDAQ:CTAS)

****

Aktenmuehle

NR

undisclosed

Cisco Systems (NASDAQ:CSCO)

****

Pure Digital

NR

$590 million

ShuffleMaster (NASDAQ:SHFL)

**

Intellectual portfolio of Elixir Gaming Technology (NYSE:EGT)

**

Undisclosed

IBM (NYSE:IBM)

****

Sun Microsystems (NASDAQ:JAVA)

**

$6.5 billion

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

Into it deep
In the aftermath of the rumors that IBM was going to bid as much as $10 or $11 a share for Sun Microsystems, shares of the Java brewer jumped 79%, suggesting investors might want to take the near-double and run. There are others who might be interested in acquiring Sun, so a bidding war is still possible.

Even so, some investors aren't convinced that the rumored premium price for the purchase reflects reality. CAPS member TSIF suggests that Sun would have agreed to sell itself for much less:

IBM is a great fit for SUN. But the premium on this is less than the stock price currently ($9.00). Sun would be lucky and happy to go for much less. They do have debt under control, good cash on hand and have positioned themselves well for a successful buyout. I think the deal will happen. The premium is the question.

Equally interesting is Cisco's decision to snag Pure Digital, the manufacturer of the Flip video camera. While making networking gear has been the core of Cisco's business over the years, it's been one of operating behind the scenes. Buying Pure Digital would put its face in front of the consumer in a much more visible fashion. Yet becoming an increasingly consumer-oriented business carries risks, since changes in tastes, trends, and even the economy can upend the best-laid plans. That might be one of the reasons behind CAPS All-Star kirkydu's seeing Cisco winning from the build out of 4G networks:

Cisco will be a major benficiary in the 4g buildout over the next five years or so. Their move into servers will likely be a good one as they are already a linchpin in delivery. It will be tough for [Hewlett-Packard], Sun... to push Cisco out since what Cisco is essentially offering to do is to make more efficient the delievery of IP for providers. $5/sh cash on the balance sheet and many competitors have just bit the dust during the financial collapse. I believe CSCO will be one of the few companies to return to their highs in short order.

Another business moving beyond its core competency is uniform provider Cintas, which recently purchased German document manager Aktenmuehle. It's not Cintas' first foray into this realm, as it generates about 30% of its revenues from business lines not directly related to uniforms, but Peter Lynch's warnings about "diworisfication" come to mind when you combine two exceedingly diverse operations.

Cintas already has a challenge in running its uniform business, considering the state of the economy and rising unemployment. Those factors were the primary reason earnings per share fell 11% in the most recent quarter and why CAPS member scknudsen thinks the company will underperform in the near term:

This stock will not fair well with the down turn in the economy. With the large number of job losses, there will be less need for this service.

A value-added offer
What's your take on these deals? Let us know on Motley Fool CAPS. And while there, you can start your own research on these or other stocks. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. There's more than you think.

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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.