What happened

Shares of SS&C Technologies (NASDAQ:SSNC) rose as much as 14.1% on Wednesday, closing the day's trading session at a 12.8% gain. Investors in the financial software specialist applauded a Reuters report, showing that the company is in "advanced talks" to buy sector rival DST Systems (NYSE:DST) in a $5 billion deal.

Two iPads showing some of SS&C's tools in action.

Image source: SS&C Technologies.

So what

Reuters' anonymous insider sources say that SS&C will pay $84 per DST share, all in cash. The merger would add DST's sizable footprint in the healthcare sector to SS&C's established success in the financial sector. The two companies' technology platforms could also benefit from a combination, borrowing features from each other to provide a more complete portfolio of solutions.

DST Systems shares climbed nearly 25% on the news and were trading just below the suggested buyout price at the end of the day.

Now what

SS&C has a long history of value-added buyouts, but DST Systems would be the company's largest acquisition to date. Keeping in mind that today's news is more of a rumor than a solid deal, a DST acquisition makes a ton of sense for SS&C and it's no surprise to see both stocks rising today.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool recommends SS&C Technologies Holdings. The Motley Fool has a disclosure policy.