NEW YORK (TheStreet) -- Shares of LDR Holding (LDRH) are soaring by 63.60% to $36.94 on heavy trading volume Tuesday morning, after Zimmer Biomet (ZBH) announced it will buy the rival medical device maker for $1 billion.
The offer of $37 per share in cash represents a premium of roughly 64% to LDR's Monday closing price of $22.58.
LDR focuses on designing surgical technologies for the treatment of patients suffering from spine disorders, whereas Zimmer Biomet produces products from orthopedic reconstructive devices to dental implants.
Zimmer's share of the spine market should increase to 7% from 5% and the company should move to number 5 from number 6 within the sector after the deal is completed, according to Larry Biegelsen, a Wells Fargo Securities analyst, Bloomberg reports.
The transaction is expected to close in the 2016 third quarter. Zimmer anticipates that the deal will begin to add to its adjusted earnings after 2017.
Zimmer Biomet stock is down 2.42% to $118.60 this morning.
About 16.49 million shares of LDR have been traded so far today, well above its average trading volume of roughly 402,368 shares per day.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D.
LDR's weaknesses include its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.
You can view the full analysis from the report here: LDRH
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.