The Return of the Strategic Buyer

With all the hype of leveraged buyouts and private equity boom, what then of the strategic buyers? IDD had a nice article on the prospect of strategic buyers returning to the game. With high cash balances, shareholders might want to see the cash being used to do deals rather than buyback stock or issue dividends. I guess the big question is, if strategics are back in the game, won't that just bid up deal values in auctions even more?