NEW YORK (TheStreet) -- Shares of Catamaran (CTRX) were gaining 24.5% to $60.14 on heavy trading volume Monday following the announcement that UnitedHealth (UNH) - Get Report will acquire the pharmacy benefit management company for about $1.28 billion.

Shares of UnitedHealth were gaining 3.5% to $122.14.

UnitedHealth will pay $61.50 in cash for each outstanding common stock of Catamaran. The deal represents a 27% premium over Catamaran's closing stock price on Friday.

Following the acquisition Catamaran will merge with OptumRX, UnitedHealth's pharmacy care services business. The acquisition is expected to be accretive to UnitedHealth's earnings in the area of 30 cents a share in 2016.

The deal is expected to close during the fourth quarter of 2015.

About 10.3 million shares of Catamaran were traded by 9:43 a.m. Monday, well above its average trading volume of about 1.7 million a day.

TheStreet Ratings team rates CATAMARAN CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CATAMARAN CORP (CTRX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

• CTRX's revenue growth has slightly outpaced the industry average of 18.4%. Since the same quarter one year prior, revenues rose by 26.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
• CTRX's debt-to-equity ratio is very low at 0.27 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.34, which illustrates the ability to avoid short-term cash problems.
• Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
• CATAMARAN CORP has improved earnings per share by 33.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CATAMARAN CORP increased its bottom line by earning $1.52 versus $1.27 in the prior year. This year, the market expects an improvement in earnings ($2.58 versus $1.52).
• The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Health Care Providers & Services industry average. The net income increased by 35.0% when compared to the same quarter one year prior, rising from $74.41 million to $100.45 million.
• You can view the full analysis from the report here: CTRX Ratings Report