It only took a day for the takeover explosion to spill into May, as two more deals were made public yesterday.

Jive Software Inc. announced that it was being acquired by ESW Capital in a $462 million deal.

The offer represents a 20% premium to where Jive Software was trading on Friday.

Duke Realty Corp. (DRE) also formally agreed to be acquired as part of a $2.75 billion cash deal with Healthcare Trust of America Inc.

Despite the fact that 68 deals have already been consummated in 2017, with 91 more pending…

Most of my readers remain oblivious to the explosive nature of takeover investing.

If you’re among the oblivious, please take notice — Trump is resurrecting previously dead money.

The president’s first 100 days in office have witnessed $729.14 billion in takeover deals hit the books.

Without any barriers to entry, Main Street investors have every right to claim their slice of the pie.

I asked my senior analyst, Martin Hutchinson, to conduct a precursory review of takeovers. That is, because I’m projecting over $3 trillion in deal flow this year.

Hutch’s full analysis is below.

Ahead of the tape,

Louis Basenese
Chief Investment Strategist

Question: Martin, you’ve agreed to help us compile the ultimate library of investment catalysts. Now, these are the most important investment catalysts out there, and they’re baseline concepts that every investor should know about.

Today we will be discussing takeovers. So let’s jump in right now, Martin. I’ll start at the very beginning. What’s a takeover?

Martin Hutchinson: Well, a takeover is when either a company or a financial institution makes a bid for a company (in which you owns shares).

Usually, it’s great news for you as a shareholder. The bids can be either partial or complete. In other words, they can take over part or all of your company. They may use cash, they may use shares or they may use some bizarre mixture of the two.

Question: Correct me if I’m wrong, but a bigger company would look to take over a smaller company to grow — just to bolt on a whole line of business. It would allow the larger company to grow in a nonorganic fashion, so to speak, by just basically taking over another company’s operation. Is that why takeovers are mostly done?

Martin Hutchinson: There are a lot of reasons why takeovers are done. But that’s the good news, in the sense that the management actually has a coherent strategy. Bolting on an additional new business by taking over another company is by and large the most effective way of adding a new business to your existing lines — if you’re not already in that business. Because growing new businesses from ground zero can take an awfully long time and cost a lot of money.

Question: But you’re suggesting that there are other reasons why a company would do a takeover?

Martin Hutchinson: There are indeed other reasons. I mean, one reason, for example, is you buy a competitor because it increases your market share. That’s why all the takeovers were done in the banking sector back in the ’90s, for example. They were expanding their geographical reach and expanding their market share of U.S. banking.