Datong, a Yorkshire-based covert intelligence gathering concern, is to be acquired by specialist surveillance company Seven in a transaction worth £7 million.

The deal will be funded by YFM and Seven’s own cash resources.

Datong put itself up for sale in February after an approach was made for the business.

Seven has offered 50p per Datong share, a 5p mark-up on Thursday’s closing price and an 11p increase on the closing price when the initial approach was made.

Seven is the parent company of Seven Technologies, based in Lisburn, County Antrim. It specialises in the field of specialist rugged computers and SCADA systems for use in hostile environments.

For the year ended 31 May 2012, Seven Technologies saw revenue of £9.2 million.

Datong develops intelligence solutions for international military, law enforcement and intelligence agencies for use in all operating environments.

Commenting on the offer, Richard Moon, chairman of Seven says, ‘We are delighted that Datong will be joining Seven and we look forward to working with Mark Cook and his team to expand the range of offerings to our growing customer base.

‘It is our intention to integrate the business into the Seven Group over the coming months.’

Paul Lever, chairman of Datong adds, ‘On behalf of the Board of Datong and its staff, we are excited by the agreement reached with Seven and look forward to a stronger future as a combined business.’