Two investment banks known for brokering small deals are combining in a deal of their own.

Piper Jaffray is nearing a deal to buy Sandler O’Neill + Partners LP for $485m in cash and stock, according to people familiar with the matter. The deal, which could be announced as early as Tuesday, would add Sandler O’Neill’s business of advising community banks on mergers, equity offerings and debt issuance to Piper Jaffray’s broader client base.