(FORTUNE Magazine) – Flip open the paper on any given day, and there's a headline of yet another merger, another industry that's benefiting from consolidation. Take Boeing, for example, which just agreed to acquire rival aircraft maker McDonnell Douglas for $13.3 billion. But much smaller-scale companies are on the hunt as well. It seems that it's no longer achievement enough to build a business: Becoming a behemoth is now part of the dream. "Everybody has the urge to merge," says analyst Keith Mullins at Smith Barney.

For investors, owning active acquirers can be a smart move. This market rewards growth, and increased size means more revenues, more clout, cost-cutting opportunities, and perhaps faster expansion. But the consolidation game is tricky; the challenge lies in identifying companies that are getting better as they grow bigger. Below are five (decidedly less glamorous than global defense) businesses that are playing the acquisition game with great success.

Junkyards, or salvage auction services, if you prefer: Copart, the biggest name in this key area of the car business, now operates in nearly all the metropolitan regions of the U.S. At its 50 locations across the country, Copart holds regular auctions where insurance companies can sell off their salvaged cars. The big volume of customers, combined with a sophisticated computer system, enables Copart to process as many as 400,000 vehicles a year--resulting in higher revenues and profits.

About a year ago, Copart entered into purchase contracts for cars that turned out to be unprofitable. Copart has now terminated these contracts, but they affected earnings throughout the year, making 1996 far from an easy ride for Copart's investors. But analyst Mullins says the road ahead looks smooth. With the stock near its 52-week low, now may be the right time to get on board. Mullins thinks Copart, whose P/E is 11.2 times 1997 earnings, can show 25%-plus earnings growth.

Death Care: The $10 billion domestic death care industry--funeral services, caskets, and cemeteries--began to transform from family-owned businesses to large corporations more than 20 years ago. It's far from over: There are about 22,000 funeral homes and 10,000 cemeteries, less than 9% of which belong to the big players, including Service Corp. and Stewart Enterprises. But just three years ago, less than 5% had been bought up. The industry's growth rate will only intensify in coming years: Death care players consider January 1, 1996--the day the first baby-boomer turned 50--a historic moment.

Cost savings post-consolidation come from casket purchases--the average funeral home buys 60 caskets per year, while Stewart Enterprises, for example, buys over 100,000. Service Corp., the largest death care organization in the world, is trying to become even mightier by acquiring Loewen, another large player. Service Corp. sports a very healthy P/E multiple of 21.5 times 1997's estimated earnings. Stewart Enterprises, a slightly smaller operator with an intense focus on "pre-need" selling (for the eternally organized), costs 23.3 times. Analyst Susan Little at Raymond James says to snap up both stocks: She expects earnings growth in excess of 20% for the next three years.

Uniform Services: Cincinnati-based uniform services specialist Cintas operates 125 facilities that provide clothes for over 1.7 million workers--about 1% of the U.S. work force. Since 1991, the company has made 48 acquisitions, yet still holds only a 17% share of the fragmented $4.3 billion market for industrial uniform services. New business avenues that Cintas may pursue in the future, such as providing career clothing for flight attendants and health care workers, could quadruple the company's potential market to $18 billion. Smart strategies ranging from a state-of-the-art computer system to internal uniform laundering make Cintas the industry's low-cost provider. Consistent annual growth in earnings of 20% over the past five years doesn't come cheap: Cintas sells for 28.6 times 1997's estimated earnings. But Elliott Shlang, who writes the LJR Great Lakes Review investment letter, says, "Cintas should be in every growth portfolio."

Water Treatment: The $25 billion worldwide water industry is consolidating quickly, and Culligan Water Technologies, a leader in water purification and treatment products for households, businesses, and industrial uses, plans to satisfy everyone's thirst. Until its spinoff about a year ago, Culligan was packed away inside the Samsonite luggage company, functioning solely as a producer of cash for its parent. Now, after a very successful year of independence, CEO Douglas Pertz is preparing an aggressive acquisition campaign. In addition, David Manlowe at NatWest Securities says that Culligan, the only brand name in the business, will be a big beneficiary of the Safe Drinking Water Act. Signed by President Clinton in August of 1996, it authorizes more than $12 billion in federal funds for drinking water programs. Culligan shares, now $36.50, trade at 22.1 times estimated 1997 earnings.

Temporary Staffing: In 1993, Golder Thoma Cressey Rauner, a Chicago private equity firm that specializes in consolidating industries, gave COREStaff the cash to buy up numerous temporary staffing businesses. The result has been a shopping spree of smart acquisitions. To date, COREStaff has purchased 25 companies--this year, the pace was about one a month--and increased revenues from just over $160 million in 1994 to an estimated $566 million in 1996. Due to economies of scale in administrative areas like back-office operations, profits have grown even faster, from $1.5 million to $18 million. According to CEO Michael Willis, plenty of work remains: Temporary staffing is a $45 billion industry in which the top ten companies still account for just over one-third of revenues. Although clerical staffing is growing at a mere 10%, almost half of COREStaff's revenues now come from information technology staffing, a hot area that's growing more than 25% a year.

COREStaff 's stock sells for a rather expensive 23.3 times 1997's estimated earnings of $0.90, but analyst Perry Boyle at Alex. Brown expects 50% earnings growth in 1997 and 35% to 40% in 1998. That sort of growth potential commands a high multiple.