Image source: Getty

What: Investors in LDR Holding Corp. (NASDAQ: LDRH), a medical device company focused on treatment of spinal disorders, are having a wonderful day. The company's shares were up more than 63% as of 10:45 a.m. ET Tuesday after news broke that it is being acquired by Zimmer Biomet Holdings (NYSE:ZBH).

So what: Zimmer Biomet has offered $1 billion to acquire LDR in an all-cash deal, valuing the target's shares at $37 each, a strong 68% premium to Monday's closing price.

The boards of directors from both companies have already approved the transaction, and the deal is expected to close in the third quarter. Zimmer Biomet will be funding the transaction with a combination of cash on hand and existing credit facilities, but once the deal closes, the company plans to issues $750 million worth of notes to repay the credit facilities.

"This highly strategic and complementary transaction will enhance Zimmer Biomet's innovation leadership in musculoskeletal healthcare by adding a premier spine platform to our portfolio of solutions," said Zimmer Biomet CEO David Dvorak.

He also stated that bringing LDR into the fold will give the company everything that it needs to become a leader in the global spine care market, a $10 billion market. 

LDR Holding's co-founder and CEO Christophe Lavigne also praised the deal, stating:

"We are delighted with this combination, which will further our commitment to improving spine care by providing greater access to our innovative product offerings for patients around the world, while offering our stockholders immediate cash value.  We have great respect for the Zimmer Biomet team, who shares our passion for innovation as well as our commitment to patients and providers."

Now what: Zimmer Biomet is not expecting this deal to alter the company's earnings projections for the year. Management reiterated its 2016 adjusted diluted EPS guidance of $7.85 to $8.00, and said it expects the transaction will be accretive to earnings after 2017.

Congratulations are in order to long-term shareholders of LDR Holdings. The company's stock has taken investors on a wild ride since it first hit the public markets in late 2013, but after today's move shares have handily outperformed the S&P 500.

LDRH Chart

LDRH data by YCharts

With shares trading within a few pennies of the board-approved acquisition price, and with a firm cash offer in hand, investors in LDR Holdings might want to cash in their chips today and start to hunt for their next home-run stock.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.