Photobox and Moonpig in £120m merger, the highly successful online greetings card company, has been snapped up by photograph printer Photobox for £120m in a deal described as a merger.

Photobox will buy Moonpig using a mix of cash funded by loans and investors, and shares in the new group.

The deal will combine Photobox’s 11m members and Moonpig’s 3m active customers to create one of the biggest online personal publishing groups in Europe.

The backers of the venture were named as fund managers Highland Capital Partners, Index Ventures and Harbourvest and a group of new private equity investors led by Insight Ventures, with Quilvest Ventures and Greenspring Associates.

Barclays and Royal Bank of Scotland provided debt finance.

Lawrence Handen of Insight Ventures will become as a director in the new group, while Lionel Bergeron of Quilvest and Ashton Newhall of Greenspring will become board observers, the companies said.

“The explosion in digital photography over the past few years has been evident in the number of our customers using their own photographs to great and often hilarious effect in our cards. Stan and I both believe that we can now offer a much wider range of photographic products to our customers while adding our own Moonpig creativity,” said Moonpig founder and chairman Nick Jenkins.

“Given the opportunities in the personal publishing market, I’m delighted to have the support of such strong financial partners who share our vision and have strong track records in supporting successful, online businesses,” said Photobox chief executive Stan Laurent.