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 Emeritus (NYSE: ESC) skyrocketed as much as 41% after the operator of senior living facilities in the United States agreed to be purchased by Brookdale Senior Living (NYSE:BKD) for $1.4 billion ($2.8 billion including debt).

So what: Under the terms of the deal, which was announced after the closing bell last night, Emeritus shareholders will receive 0.95 shares of Brookdale common stock, valuing the company at $29.58 per share as of this writing. The combined company will have 1,161 locations across 46 of the 50 U.S. states, as well as 10% of the senior housing market share, leaving plenty of room for further market share expansion. The buyout is expected to be EPS neutral in the first year for Brookdale, but will add $0.40 in EPS by the third year, and is expected to close sometime in the third quarter.

Now what: It's a smart move for both companies, with Emeritus shareholders getting a hefty premium based on yesterday's close and Brookdale entering the more populated West Coast markets via its new acquisition. It's also a smart maneuver considering that Medicare reimbursements are likely to fall over the long term as the Centers for Medicare and Medicaid Services continues to pare back as much health-related government assistance as is reasonable Thus, cost synergies from their merger should work in Brookdale's favor. Falling Medicare reimbursements do personally concern me, though, which is why I'd prefer to stay on the sidelines following today's pop; but I'd certainly be all for adding Brookdale to your watchlist moving forward.