Private equity firm Advent International said it had agreed to buy Britain's Domestic & General in a deal that values the domestic appliances insurer at around 523.9 million pounds ($1.06 billion).
Advent is to pay 1,425 pence for each Domestic & General share, representing a premium of 25.7 percent to where the stock stood before the provider of extended product warranties said on May 18 it had received an approach about a possible offer.
Shares in Domestic & General closed at 1,264p on Thursday.
"We have significant experience in the financial services sector and, with the support of Advent's international network, look forward to working with D&G's management and employees in continuing to develop and invest ... in its business," Advent Chairman John Singer said in a statement.
Domestic & General's independent directors unanimously recommended the deal.
"Whilst we believe there to be significant long term potential in D&G, Advent's offer allows shareholders the opportunity to realise their entire investment now at an attractive cash premium," Chairman Nicholas Rochez said.
The Financial Times had earlier on Friday cited people close to the situation as saying a deal was close and that it would be the first public-to-private transaction announced since turmoil in credit markets shut down leveraged buyouts.
Last week, British home emergency cover provider Homeserve pulled out of talks to acquire Domestic & General. However, Domestic & General had said at the time that other discussions about a possible offer would continue.