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Tickers in this Article: LLY, MDT, ELX, SAP, SY
Although many companies have seen their stock prices hit or approach new 52-week lows recently, not all have gone on the defensive. As a matter of fact, a few with particularly strong balance sheets are looking to expand and possibly utilize the downturn to acquire weakened competitors. Here are four companies that are shifting into overdrive:

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Looking Overseas
The pharmaceutical giant Eli Lilly (NYSE: LLY) sees the international markets as providing the next leg in the company's growth saga. The company told The Wall Street Journal that it wants to double its sales in emerging markets over the next five years. Part of Eli Lilly's approach to accomplishing this goal will include keeping an eye out for strategic takeover targets.

The company is already off to a strong start. In Q1, Lilly reported that its revenue from outside the U.S. grew 13% on a year-over-year basis. Zyprexa, which accounted for 22.1% of the company's Q1 revenue, saw its sales abroad increase by 7% when compared to the year-ago quarter. Eli Lilly shares are down 6% in 2010, however.

The medical device maker Medtronic (NYSE: MDT) is planning some moves of its own. The company is planning to roll out 60 major products between now and next April. Although it is not looking for any large-scale acquisitions, Medtronic has been open to smaller-scale deals in recent years to bring new products on board. It seems likely that this trend will continue.

Getting Chippy
On June 7, the networking solutions company Emulex (NYSE: ELX) disclosed that it is entering into a $155 million cash-and-stock deal for ServerEngines, a privately held semiconductor company. The deal is expected to close in July and will enhance Emulex's presence in the storage and server infrastructure markets.

This is a sizable acquisition for a company whose market cap presently stands at just over $766 million. The previous business partnership between these two companies made ServerEngines an ideal takeover candidate. It could take some time for Emulex shareholders to see the payoff, though. ELX shares have fallen 12% so far this year.

One other tech company that is looking to also continue along a path of expansion is SAP (NYSE: SAP). The company made a $5.8 billion bid for Sybase (NYSE: SY) last month, and SAP's CEO Jim Hagemann Snabe has said his company is open to other large acquisitions. SAP shares are down 6% year-to-date.

The Bottom Line
The market volatility that has persisted over the past few years has been unkind to companies that have lacked sound fundamentals. It has also presented M&A opportunities for the best in breed as demonstrated by the companies mentioned in this article. As long as this trend continues, investors can expect to see a string of shrewd deals by those companies that are able to keep their heads above water. (Learn more about successful M&A; see What Makes An M&A Deal Work?)

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