What: Shares of security software provider CyberArk (NASDAQ:CYBR) soared on Wednesday following a report that Check Point (NASDAQ:CHKP) is engaged in talks to acquire the company. At noon Wednesday, the stock was up about 23%.

So what: This is just a rumor at the moment, and an analyst from Oppenheimer believes that the chances of a deal taking place are low. However, with Check Point having a market capitalization of just over $14 billion, as well as roughly $3.6 billion of cash and investments, compared to CyberArk's market capitalization of about $1.7 billion after today's rise in the stock price, the deal is very doable from a financial perspective.

It would be an expensive acquisition for Check Point, despite its ability to afford the deal. CyberArk generated $146 million of revenue and $23 million of net income over the past 12 months, putting the current stock price at about 11.6 times sales and 73 times earnings. CyberArk is growing fast, posting revenue growth of 56% in 2014, and its GAAP profitability is an exception rather than the rule in the cybersecurity software market, but this growth would need to continue for many years in order to justify the purchase price for Check Point.

Now what: Consolidation in the security market is bound to occur over the next few years, regardless of whether this particular deal ends up being a reality. Cisco Systems (NASDAQ:CSCO), which aims to grow its own security business, has acquired a slew of smaller security firms over the past few years, and the company will likely continue doing so for years to come. Cisco estimates that the average large enterprise has 54 separate security vendors, making for a complex and convoluted security landscape.

Any small security company is a potential acquisition target for Cisco or any other large provider of security software and services, and the number of companies scrambling for market share will likely be reduced in the coming years through mergers and acquisitions. While the Check Point-CyberArk deal is far from certain, CyberArk will remain an acquisition target regardless of whether this particular deal goes through.