What: Shares of Xoom Corporation (NASDAQ:XOOM) were up 21.7% as of 10:30 a.m. Thursday after the digital money transfer specialist announced it will be acquired by eBay's (NASDAQ:EBAY) PayPal.

So what: Specifically, PayPal will acquire Xoom for $25 per share in cash, representing a premium of 32% over Xoom's three-month volume-weighted average and a roughly 21% premium to yesterday's close. The deal also assigns an enterprise value to Xoom of roughly $890 million, and was unanimously approved by both companies' boards of directors as well as eBay's board.

"Expanding into international money transfer and remittances aligns with our strategic vision to democratize the movement and management of money," stated PayPal president Dan Schulman. "Acquiring Xoom allows PayPal to offer a broader range of services to our global customer base, increase customer engagement and enter an important and growing adjacent marketplace."

Xoom president and CEO John Kunze added "Becoming part of PayPal represents an exciting new chapter for Xoom, which will help accelerate our time-to-market in unserved geographies and expand the ways we can innovate for customers."

Now what: For perspective, shares of Xoom currently trade around $0.20 per share above the acquisition price, so I wouldn't blame Xoom investors for taking today's quick gains off the table and putting them to work elsewhere.

That said, the purchase comes just ahead of PayPal's planned third-quarter separation from eBay. And leading into the separation, PayPal has performed admirably, with first-quarter net total payment volume climbing 18% year over year to $61 billion. PayPal's active accounts also rose 11% year over year to 165 million, while total transactions processed during the quarter increased 24% to 1 billion. In the end, the acquisition of Xoom should only serve to accelerate that progress in PayPal's imminent life as a new publicly traded company. So if Xoom investors still like the combined businesses' long-term story, picking up shares of eBay ahead of the split could still be a prudent move.

Steve Symington owns shares of Apple. The Motley Fool recommends Apple, eBay, and Xoom. The Motley Fool owns shares of Apple, eBay, and Xoom. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.