Kennedy-Wilson Inc., a real estate investment firm in Beverly Hills, announced it is merging into Prospect Acquisition Corp. of Naples, Fla.

Under the agreement, Prospect will bring about $248 million that the new company will use to invest in distressed real estate. Following completion of the transaction, the new company will change its name to Kennedy-Wilson Holdings Inc.

Prospect is publicly traded as a special purpose acquisition company. As part of the transaction, Prospect will issue 26 million shares of common stock to the current holders of common and preferred stock of Kennedy Wilson and 4 million restricted shares to Kennedy-Wilson senior management as an incentive and retention tool. These shares will vest over a three-year period.

“This merger will allow us to significantly enhance our resources,” said William J. McMorrow, Kennedy-Wilson’s chief executive. “Within our core markets, significant opportunities are emerging, particularly in the residential, multifamily and office sectors, which we expect to take advantage of with the consummation of this transaction.”

In mid-morning trading, shares of Prospect were down 1 cent, or 0.1 percent, to $9.78.