Mercia Asset Management perked up as it acquired Birmingham-based Frontier Development Capital for up to £9.5mln plus net cash.
FDC focuses on loans to SMEs worth £2mln or more, compared to the £0.2-£1mln Mercia typically lends.
The acquisition boosts Mercia's lending arm to £531mln under management and total assets under management to £1.4bn.
Mercia also raised its interim dividend by 10% today as profits rose by 50% and net assets under management increased by 3% to £979mln.
Shares rose 3% to 31.8p having been up 9% earlier.
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