Whether you're talking about small "tuck in" acquisitions, large megamergers between industry giants, or even just taking significant stakes in other companies, the urge to merge remains strong.

We can't always tell the good deals from the bad. While we might get "synergy," we can just as easily get what investing legend Peter Lynch called "de-worse-ification": weakening an existing business's core competency by grafting on wildly unrelated subsidiaries.

Breaking down the buildup
We're going to take a shortcut to distinguish the good deals from the dealbreakers. We'll see how the 70,000 investors in the Motley Fool CAPS universe rate the companies hooking up. If two highly rated companies seek a better life together, we figure they might also do better down the road. Conversely, if one company is highly rated and the other low, we might expect one set of investors to come out ahead, since those ratings forecast investor sentiment of future prospects.

Could troubles in the capital markets finally be taking their toll in the M&A arena? While deals won't stop, you should expect to see more stock swaps play a major role in transactions now that easy credit is a thing of the past. Here's a handful of some of the recently announced deals and the CAPS community's ratings for the players involved, on its scale of one to the maximum five stars:

Acquirer

CAPS Rating

Target

CAPS Rating

Deal Price

ESCO Technologies

**

Doble Engineering

NR

$319 million

Nasdaq Stock Market
(NASDAQ:NDAQ)

*****

Philadelphia Stock Exchange

NR

$652 million

Providence Service

***

LogistiCare

NR

$220 million

Old Second Bancorp

NR

HeritageBanc

NR

$86 million

Terex (NYSE:TEX)

*****

Superior Highwall Miners

NR

$140 million

Dell (NASDAQ:DELL)

**

EqualLogic

NR

$1.4 billion

Gramercy Capital

**

American Finance Realty
(NYSE:AFR)

**

$3.4 billion

Honeywell (NYSE:HON)

****

Maxon

NR

$185 million

Symantec (NASDAQ:SYMC)

**

Vontu

NR

$350 million

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

While merger activity has slowed to a relative trickle, with only $192 billion in deals being consummated in September, the first nine months of 2007 have still been the busiest ever. According to Thomson Financial, for the year to date ended Sept. 30, more than $3.6 trillion in deals were made, just surpassing the figure for all of 2006 and nearly doubling 2004's hectic pace. Dealogic also reports there has been more than $13 trillion worth of deals made since 2004, making it the richest period since the tech boom at the turn of the century.

So what do CAPS investors think about these targets and acquirers? While these deals are not particularly large compared to those we've seen in recent weeks -- Gramercy Capital's acquisition of the principal landlord of Wachovia and Bank of America (NYSE:BAC) alone tilts the scales at more than $3 billion -- most of the companies also don't find much favor with investors, as most of the publicly traded companies garnered an average of just two stars.

Dell farms storage
The second-biggest deal featured is Dell's grab of storage provider EqualLogic, which was just getting ready to go public. The computer maker's move into the M&A fast lane puts it in control of "one of the rising stars of the storage market," according to one industry analyst. EqualLogic's Internet SCSI, or iSCSI, allows midsized business opportunities to route storage traffic over existing IP networks, which should lower costs.

More than 3,900 players have rated Dell, with slightly more than two-thirds of them considering the stock an outperformer. CAPS All-Stars, those players with the best investing records, are somewhat more positive about its future, with 75% weighing in with an outperform endorsement. It's possible, though Dell's aggressive acquisition may improve investor sentiment. All-Star vkrish98, with a 95.79 player rating, thinks the move is a good one.

Dell is jumping into the virtualization market by buying EqualLogic. Even though its earlier work with Convergenet did not work out, I think this may be a way for Dell to get back in the game. If shares of VMW are any indication, there is lot of money to be made here.

CAPS investor KipLargo thinks Dell's computers will help it make the turnaround it needs.

I feel like they'll do a turn around much like IBM did in the 90's. So there's room here. Dell's new notebooks are very competitive and its brand will wash off the boring dork persona. Also, I like that they are at Wal-mart. Perfect brand for the billions that shop there. I do believe if you buy a PC, Dell has always been the best value.

A value-added offer
What's your take on these deals? Should investors accept the cash or take stock in the new company if offered? Only at Motley Fool CAPS is your opinion as valuable as the pros. Tell the CAPS community whether the urge to merge is good to go, or if it would be better to fight for independence.

Dell, Nasdaq, and Symantec are all recommendations of Motley Fool Inside Value. Merge your value investing ideas with a 30-day risk-free trial subscription.

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. Dell is also a selection of Stock Advisor. Bank of America is a recommendation of Income Investor. The Motley Fool has a disclosure policy.