NEW YORK (Real Money) --Specialty pharma.

Know those two words. Because that's the hottest category in the market right now, and portfolio managers are scrambling to own one or even two to be able to outperform the averages.

What is a specialty pharma company? It tends to be a drug enterprise that is a combination of proprietary drugs and generic drugs. You hear about these companies all the time because they are in a race to merge with each other and become as big as possible. They are often domiciled overseas so they can take advantage of the lower tax regimes that exist beyond our borders.

Take yesterday's bid for Perrigo (PRGO - Get Report) by Mylan (MYL) both of which are specialty pharma. Perrigo makes knock-offs, but it also makes prescription drugs.  Mylan has a fabulous, long-standing generic drug franchise. These two would be a match made in heaven. I don't think Perrigo wants to sell at any price, but it is worth it to Mylan to go well beyond yesterday's bid because Perrigo had only recently stumbled, causing the stock to interrupt its fabulous trajectory. It's at a big discount to where it could be next year at this time. The fact that it has a low tax status because of its Irish headquarters doesn't matter because Mylan is inverted, too.

Don't forget, I have been recommending Perrigo for years because of its link to the new frugality, the post-recession desire to pay less for the exact same branded product.

How hot is this deal? It is possible that Teva (TEVA), another specialty pharma company, could be interested in one or both of these companies. That's a big reason why Mylan ran yesterday even as it might be paying a lot more to get Perrigo.

We see the same logic behind the Actavis (ACT) and Valeant (VRX) deals for Allergan (AGN) and Salix Pharma (SLXP), respectively. Here are two acquisitions that have all of Wall Street excited and have gotten both the acquirer and the target juiced.

Actavis started off as a generic company known as Watson Pharma but has since, with the purchase of first Forest Labs (FRX) and then Allergan, vaulted to the very big leagues. It could afford to pay a big price for Allegan because it's headquartered in Ireland so no U.S. drug company could really compete with them for Allergan. Given that this company could earn $25 a share, which would put its growth at a much higher pace than traditional big pharma, this has become the go-to specialty pharma name.

Valeant's more of a me-too, slash-and-burn player that often criticizes companies for spending too much on research and development. Still, it dovetails well with the gastrological franchise of Salix, and investors lapped that one up, too.

What else could happen here? How about considering what's been going on with Horizon (HZNP), a specialty company I had on Mad Money just a couple of months ago. It's been making acquisitions of old drugs and revitalized them and it just announced the purchase of a proprietary drug company, which now gives it the specialty pharma rubric. Finally there's Mallinckrodt (MNK), another Irish company -- really based in St. Louis -- that was spun off almost two years ago by Covidien (COV). It's got a terrific series of drugs that qualify it for specialty pharma status, and even though it has run tremendously, it is still a candidate for a bid, something I wouldn't mention if the company were doing poorly, but that's certainly not the case.

Actavis, Horizon, Mallinckrodt, Mylan, Perrigo, Teva and Valeant are the specialty pharma names that are loved and will stay loved as long as they have much faster growth than the traditional companies in the industry. This is at a time when growth remains hard to come by.

Editor's Note: This article was originally published at 1:58 p.m. EDT on Real Money on April 9.

At the time of publication, Jim Cramer's charitable trust Action Alerts PLUS held no positions in stocks mentioned.