Aim-listed SpaceandPeople – which is based in Glasgow and works with blue-chip clients including Coca-Cola, Orange and Smirnoff – will raise 1.1m through a share placing to help fund the deal.
London-based Retail Profile provides stalls in 39 shopping centres – including six in Scotland – to more than 500 vendors who run seasonal stalls or do not need full-sized shops.
Retail Profile also has a long-term franchise agreement with the Mega chain of shopping centres in Russia.
SpaceandPeople, which fills advertising space in shopping centres, such as raffles for sports cars or giveaways of fruit juice samples, said the takeover would help the company to grow its margins.
Matthew Bending, chief executive of SpaceandPeople, said: "This acquisition is the cornerstone for the future development of the company. The combined group's growth potential is significantly enhanced."
Martin Kemp, managing director of Retail Profile, and Maurice Helfgott, the firm's chairman, will join the board of SpaceandPeople as retail director and as non-executive director respectively. Julia Langkraehr, founder of Retail Profile, will continue as international development director.