Moonpig.com is to merge with digital photo service, Photobox.
Photobox will pay £120 million for the personalised greeting cards website. Some of this will be paid for with shares in the new company, while some will be from bank loans and new funding from private equity investors.
Senior management will remain from both companies, according to BBC News.
Moonpig.com is hopeful the merger will allow it to expand its core business into territories which would be difficult to enter as a standalone business.