The move follows a partnership formed with Mears late last year to jointly bid on repair and maintenance contracts in the social housing sector.

PH Jones’ social housing business currently provides central heating service and repairs for around 250,000 properties under 42 contracts.

It also carries out over 8,000 central heating installations every year through 28 contracts within the social housing sector.

The acquisition will see British Gas take on around 850 employees, of whom approximately 560 work in the Social Housing business.

The deal does not include the Utility Services business previously operated by PH Jones, which will be retained by the vendors.

Social housing represents 20% of the UK’s housing stock (around 5 million homes) and the sector is forecast to spend £3.5bn a year on energy services by 2012.

The market is forecast to grow further, driven by the growth of microgeneration and renewable heating resulting from Government targets to reduce the UK’s carbon emissions by 80% by 2050.

Betsy Bassis, managing director of British Gas Community Energy, said: “Social housing is a strategically important market for British Gas.

“It not only represents 20% of Britain’s housing stock, but it is also an early adopter of energy efficiency and renewable technologies.

“We are committed to creating a leading energy services business for the public sector and our focus is on growing successfully through a combination of strong organic growth and our partnership with Mears, one of the leading providers of repairs and maintenance in social housing.

“The acquisition of PH Jones significantly accelerates our growth strategy in social housing.  PH Jones is a successful, profitable company in this sector and combining its strengths with those of British Gas will deliver important benefits for our customers.”