Rathbones has struck a £104 million deal to buy Scottish wealth manager Speirs & Jeffrey.
The acquisition will be part funded by a placing of 5% of Rathbones' share capital with institutional investors. The shares have been priced at 2,500p each and will net the firm £60 million if demand is met.
The deal has been structured through a cash payment of £79 million and £25 million through the issue of new Rathbones' shares, which will be locked up for three years from completion.
Speirs & Jeffrey, which was formed over a century ago, is Scotland's largest independent wealth manager with funds under management of £6.7 billion and 38 investment professionals. It has 8,500 clients on its books with around 75% of them using the firm for over 10 years.
All of Speirs & Jeffrey's current directors and investment managers will be joining Rathbones.
The firm's CEO Russell Crichton will become head of Rathbones' Scottish business. Its Glasgow team will consolidate with Rathbones' existing presence in the city, which in the process becomes the firm's second largest office after London.
Overall the deal increases Rathbones funds under management by 18% to £44.5 billion.
In a stock exchange announcement, Rathbones said the strong cultural fit between the two business was a major factor behind the deal.
Rathbones CEO Philip Howell (pictured) said: 'From the outset of our engagement, both teams have recognised how compatible they are in culture, investment philosophy and dedication to client service.
'Speirs & Jeffrey represents an ideal strategic, professional and geographic fit with Rathbones and we look forward to working together both to develop our business in Scotland and deliver compelling returns for our shareholders.'
Crichton added: 'My colleagues and I have long admired Rathbones, and everything we experienced during our discussions has merely strengthened our conviction that it offers the very best fit for our clients and our people.
'With our client-facing staff members committed to and enthusiastic about the future, clients will continue to enjoy the high level of personal service which has become the hallmark of our firm, but with the additional significant benefits of Rathbones' scale, specialist expertise and deeper capabilities.
'The fact that our team will remain intact and that our clients will continue to receive the same exacting standards of personal service, whilst benefiting from the wider resources of Rathbones, fills me with great confidence for the future.'
Subject to regulatory approval, the deal with go through in the third quarter.
Rathbones expects an underlying earnings per share accretion of 'at least 8%' and a return on investment of around 13% in the third year following completion of the deal.