Beleaguered accountancy firm RSM Tenon is being sold to rival Baker Tilly under a rescue deal that will wipe out shareholders and leave its lender nursing hefty losses.
RSM - the UK's seventh largest accountancy firm - called in administrators Deloitte, but its main trading entities were not part of the process and were sold immediately to Baker Tilly.
The so-called pre-pack administration has helped safeguard the 2,300-strong workforce at RSM while clients and suppliers are also set to remain largely unaffected.
But RSM confirmed investors will get nothing for their shares from the deal, while taxpayer-backed lender Lloyds Banking Group will also fail to recoup all of its £80.4 million in loans to the group.
Baker Tilly had already been in discussions with RSM about a takeover, but pulled out of the talks, while Lloyds then refused to grant a covenant waiver on the debts, dealing the final blow to the group.
Baker Tilly then moved to snap up RMS's trading divisions following the group's collapse into administration.
Matt Smith, joint administrator and restructuring services partner at Deloitte, said the sale to Baker Tilly "represents the best outcome for the RSM group".
He added: "The management of the group have stabilised the business, returning it to profitability over the past 18 months and making this transaction possible to secure its future.
"In the meantime we are working closely with the directors of the trading entities and their management and staff to continue to support the business until the sale is completed."
The deal is expected to close within the next two weeks.
RSM was thrown into turmoil after posting hefty losses and revealing accounting irregularities last year that meant it had to restate accounts.
After admitting in 2012 that the business had ''not been managed in the way it should have been'', it has since been slashing costs and seeking to reduce losses.
It has shed hundreds of its staff in an effort to save cash as it struggles under its debt pile.
Results for the half-year to December 31 showed losses narrowing to £10 million from £70.6 million a year earlier, but revenues came under pressure and the firm recently said turnover had not improved in the third quarter.
RSM Tenon has 35 offices across the UK.
Baker Tilly has a network of 26 offices and more than 1,600 staff and over 220 partners.