Companies easy prey for acquisition hunters.

52 of the UK's Top 2000 Computer Software companies have been named and identified as classic acquisition targets. This finding has been extracted from a new survey by industry analysts Plimsoll Publishing Ltd. The survey has assessed each of the UK's leading Computer Software companies on their overall financial strength and 8 measures of acquisition attractiveness.

The 8 measures are. all recognised criteria used to locate and assess a company from an acquisition point of view. David Pattison, senior analyst on the project, comments;

"What we have done here is the donkey work. This analysis cuts out hours and hours of boring research. It just leaves you with the sexy bit of actually making the decision to buy one of these companies."

A company scored a point for each of the following 8 criteria it met:

* 675 companies have sales growth above the industry average If the company is generating healthy sales then a new owner may more interested in it as a basis of building a bigger future company.

* 524 companies have a low financial rating If the company is showing signs of financial stress, a new owner may well be interested in buying it cheaply, cutting costs and returning stability.

* 471 companies generate high actual earnings, yet lose money These companies all have high earning potential, but also high overheads. New owners will look to reduce debts, salaries and other costs to improve profits.

* 275 companies have a big difference between their current and future values Using the current year and a projected future year, the difference in the company's actual value was calculated. Isn't any company that can be bought cheaply and then increased in value a classic acquisition?

657 companies have directors fees talking a high proportion of profits High directors' fees often indicate a "lifestyle" factor in the company. New owners should be able to reduce this figure and retain more profit for the company.: www.plimsoll.co.uk

* 181 companies have a high average directors age Probably the factor that most interests the classic acquirer. Spotting an ageing board is often seen as a way to an amenable approach.

* 545 companies do not have a parent company Having a holding company may make negotiations complex. Acquisition hunters need not worry as there are plenty of independents to review.

* 734 companies are controlled by a small board of directors With fewer directors, a unanimous decision to sell is more likely to be made.

The more points a company scores, the more attractive it becomes to a potential acquirer.

Companies and how they scored:

0  641
1  221
2  355
3  337
4  254
5  140
6  43
7   8
8   1

The full study contains an individual analysis of each of the 2000 companies based on their latest 4 years of financial performance. Also included is an analysis and scoring of companies based on their acquisition attractiveness, including a company valuation

www.plimsoll.co.uk