Warpaint London said it will issue new shares to fund an acquisition of colour cosmetics business Retra for up to £18.2m.
Warpaint intends to raise up to £21.2m via a placing of shares at 190pc each.
Retra recorded profit before tax of £2.3m on sales of £17.5m in the year through December.
"This acquisition will provide Warpaint with access to new customers and suppliers, increased numbers of product development personnel and additional exposure to the gifting market, an area of increasing focus for Warpaint," joint chief executives Sam Bazini and Eoin Macleod said.
At 10:05am: (LON:W7L) Warpaint London Plc share price was -4p at 202.5p