Updated from 9:28 a.m. EDT

Software Spectrum

(SSPE)

was climbing 118% after announcing that it would be acquired by

Level 3 Communications

(LVLT)

in a deal worth about $122 million.

Level 3 will acquire all the shares of Software Spectrum for $37 a share in cash, valuing the stock at about a 120% premium on its Wednesday close of $16.65. The merger has been approved by the boards of both companies, and shareholders representing 28% of Software Spectrum's outstanding shares have pledged to vote in favor of the merger.

Assuming approval, Level 3 plans to combine Software Spectrum with its recently acquired Corporate Software. The deal is expected to close in the third quarter.

Shares of Software Spectrum skyrocketed to $36.30 on the news, and Level 3 was up 8% to $3.90.