As I write, Pulsion Medical is up about 19% on the day, as it has received a takeover offer at €16.90, in cash.   This is the second takeover offer one of my stocks has received in a few months, as Veripos is currently the subject of a bidding war.  One of the things these events highlight is that when you buy high quality, growing small caps, there are many ways to win, and takeovers are one of them.  Often larger companies find it far easier to grow by acquisition, and Pulsion Medical would make a fine addition to a medical company’s portfolio.  There are a few problems with takeover’s, however, although admittedly they fall into the category of “nice problems to have”.  First, I manage my portfolio very carefully to try and minimise capital gains tax.  If the Pulsion takeover goes through before Q2 next year, then the resultant gain will take me over my limit for the year and I will have a tax liability, which is annoying.  I suppose there’s nothing that can be done about this.  Second, I now have to find something to replace Pulsion, which is probably the highest quality company I own, if not the cheapest.  Many of the opportunities I am seeing right now aren’t the (in retrospect) easy lay ups that were available at the start of the year – FBD, B&C Speakers etc.  I guess this means I shall need to work a little harder, there’s always something to buy.