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 Varian Semiconductor (Nasdaq: VSEA) soared a staggering 51% today after Applied Materials (Nasdaq: AMAT) offered to buy the mobile device chip equipment specialist for $4.9 billion.  

So what: The all-cash deal values Varian shares at $63 per share and represents a whopping 55% premium to its closing price on Tuesday. Applied Materials is paying about 14 times Varian's EBITDA, a bit pricey based on recent deals, but with the move giving Applied Materials direct access to the high-growth smartphone space, management believes Varian is well worth the price.  

Now what: Varian's upside is obviously limited at this point, but Applied Materials might be worth considering. Given its cash-generating prowess, Applied Materials should be able to pay down the deal-related debt in relatively short order, so the move won't stress its financial position all that much. And while management may have paid too full of a price for Varian, Applied Materials' growth prospects have surely improved.

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

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