Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Sonic Solutions (Nasdaq: SNIC) surged 25% after Rovi (Nasdaq: ROVI) said it would acquire the DVD-burning software specialist in a cash-and-stock deal valued at about $720 million.

So what: Rovi is making the purchase to enhance its digital offerings, with the two companies better able to address, as CEO Fred Amoroso puts it, "the expanding digital entertainment market with unique capabilities that will bring enhanced value to consumers." The deal values Sonic's common stock at $14.17 a share, representing about a 26% premium to Wednesday's close.

Now what: Both boards have approved the deal, which is expected to close in the first quarter. Sonic Solutions shareholders can elect to receive either $14.00 or 0.2489 shares of Rovi stock for each share tendered. Usually, I'd just opt for the cash and run, but with the deal expected to add $0.05 to $0.10 to Rovi's 2011 adjusted income, Rovi might not be a bad bet going forward.

Interested in more info on Sonic? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

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