Insurance software company The Innovation Group (TIG) is raising £185m to pay for its £182m purchase of privately-owned software company Huon Holdings.

It is issuing 33.6 million shares at 550p, which will raise £176m net of expenses. TIG's shares closed at 895p on February 20, when dealing was suspended pending the proposed takeover.

TIG will pay £113m in cash for Huon, with the balance made up of new shares. Huon's chief executive, former Misys director Mike O'Leary, will join the board of the new group, but Huon's founders, brothers Malcolm and Ray Freake, will retire.

TIG's shares resumed trading on May 18. Trading in the new shares will begin on June 15.