The news that Patriot Coal agreed to buy Magnum Coal for $559 million sent coal producers soaring on Thursday as investors scrambled to figure out which company will be swept up next.

The good news, said Natixis Bleichroeder analyst Jeremy Sussman, is that there should be similar consolidations going forward, with public companies buying up private players like Magnum.

Investors have been looking for a big acquisition in the space for several years–especially in the Central Appalachian region, which many think would operate more efficiently if consolidated, since there are so many smaller players in the space, said Sussman.

Patriot Coal’s shares surged 17.5%, or $8.20, to $55.15 in afternoon trading on Thursday following the news about the acquisition, which was released late Wednesday. The acquisition would make Patriot the seventh-largest coal producer in the U.S.

Magnum shareholders will get 11.9 million shares of newly issued Patriot common stock. Patriot will also assume debt estimated at $150 million. Including the debt, Patriot estimated the deal was worth $709 million.

Sussman said the acquisition was a “fantastic” move for Patriot because the price looks attractive. He said the deal will be “highly accretive” within the first year.

Magnum operates 12 mines and seven preparation plants in Central Appalachia. Patriot said it expects to complete the acquisition around midyear. The deal still needs approval from Patriot shareholders.

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