British Gas is aiming to become the country’s biggest insulation provider and currently employs 1,100 people in the field.

ECL Contracts Ltd is based in Rugby, Warwickshire and currently employs 31 staff.

The acquisition will enable British Gas to diversify its own product range beyond loft and cavity-wall insulation and into solid-wall insulation. There are around 9 million homes in the UK of solid wall construction.

Malcolm Smith, Managing Director, ECL Contracts, said: “This is great news for ECL Contracts and a reflection of the hard work and skill of all our people.

“I joined ECL Contracts 14 years ago and I’ve seen the company go from strength to strength. We are now starting a new chapter and are thrilled at being part of one of Britain’s most successful companies”

Demand for home insulation is forecast to rise significantly in the next five years with spending predicted to rise from around £0.6 billion a year in 2010 to £1.4 billion in 2015.

Government programmes such as the Green Deal are also expected to make energy efficiency more attractive to British households.

Jon Kimber, Managing Director of British Gas New Energy, said: “This acquisition is part of the continuing success story of the British Gas insulation business.

“At British Gas, we are building the country’s leading insulation business, reducing household carbon emissions, and helping our customers lower their energy bills.

“The insulation market is growing, and insulating homes is the cheapest way to reduce energy bills. ECL Contracts Ltd, like British Gas, has a real passion for great customer service, and we are delighted to have secured the skills of such a great team”