Under the proposed terms, approved by the board of directors of both firms, Espotting's stockholders will receive seven million shares of the US-based FindWhat.com's common stock and approximately $20 million (£10.7m) in cash.
FindWhat.com will also issue options and warrants to buy an estimated 800,000 shares of its common stock to Espotting staff and affiliates.
At FindWhat.com's closing share price on 6 February 2004, the transaction values Espotting at approximately $170m (£92m).
Daniel Ishag, Espotting's CEO and co-founder, said: "We have been in discussions with FindWhat.com on a merger of our two companies for over a year. We have never wavered from our belief that we can create significantly greater value for all our constituencies as one combined organisation.
"We continue to feel that, with this transaction, both companies achieve a step-change in scale, which should allow us to capitalise fully on the rapid expansion in performance-based online marketing," he added.
Espotting was formed in February 2000 and launched its service in the UK in the September. In the last two years, Espotting has rolled out its service to nine additional markets across Europe.
FindWhat.com was formed in March 1998, becoming a publicly-traded firm in June 1999.
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