Outsourcer Mitie said on Thursday that it has agreed to buy AIM-listed Marlowe in a £366m deal.
Under the terms of the acquisition, Mitie will pay 1.1 in new Mitie shares and 290p per share in cash, representing a total implied value of 466p a share.
This is a premium of about 26.5% to the closing Marlowe share price on Tuesday, which was the last day before market speculation of an approach.
Mitie chief executive Phil Bentley said: "Mitie has transformed its business over the past eight years, disposing of businesses where it could not build a leading position and adding scale through the acquisitions of VSG and Interserve to become the UK's leading Facilities Management company. Since then, acquisitions to add Projects capabilities in Power & Grid Connections, Renewable Energy, Data Centres, Fire & Security and Sustainability have pivoted the business to become the UK's leading Facilities Transformation company.
"With growing legislation around Fire, Security and Water & Air Quality, our clients need a partner who can also offer a broad range of Facilities Compliance capabilities. In a growing Testing, Inspection and Certification (TIC) market valued at £7.6 billion per annum, Marlowe stands out as a leader in Fire & Security and Water & Air and Asbestos compliance.
"Adding Marlowe's circa 3,000 highly respected colleagues to Mitie's capabilities and providing access to Mitie's clients will generate significant revenue growth opportunities as well as immediate cost efficiencies. We are excited about the next chapter in Mitie's history to become a leading Facilities Compliance provider."
News of the acquisition came alongside Mitie's results for the year to the end of March, which showed that operating profit operating profit before other items rose to £234.1m from £210.2m the year before.
Revenue jumped 13% to £5.1bn and the total order book grew 35% to a record £15.4bn.
At 0830 BST, Mitie shares were down 9.4% at 144.60p, while Marlowe shares were 7.9% higher at 438.12p.