AIM-listed financial services group Vantis is to take over rival Numerica in a deal valued at £15.8 million.
Under the terms of the recommended offer, Numerica shareholders will receive 16 new Vantis shares for every 73 Numerica shares they hold or opt for cash.
The cash offer values Numerica at 30p per share, a 36 per cent premium on Friday's closing price of 22p.
Vantis will claw back some £12 million from the sale of Numerica offices in Bristol, Manchester and Southampton to BDO Stoy Hayward.
Numerica's Birmingham operation, which recently expanded into overspill offices in the Institute of Directors' complex in Victoria Square, will stay with Vantis.
Vantis believes the acquisition will strenghten its operations by giving it a better geographical spread as well as greater exposure in the key central London financial services market.
Chairman Paul Gourmand said: "This is important for the development of Vantis.
"The consolidation of two competitors, Vantis and Numerica, greatly enhances our market position, offering synergies across the group and opportunities for growth."
Christopher McCann, chairman of Numerica, said: "This is a good offer for Numerica shareholders and gives them the opportunity to participate in the combined group or to take the cash alternative."