The deal gives CALA greater coverage across central and southern England and will create a £500m turnover company.

Banner Homes currently operates from 21 sites across three regional operational centres in the northern Home Counties, the southern Home Counties and the Midlands.

Banner sold 235 homes during the twelve months to May 2013 resulting in revenues of £111m and operating profit of £16.4m at a gross margin of 24%.

Banner’s land bank has almost 1,100 units which will add to CALA’s stock of 10,770 plots.

The deal is the latest step in CALA’s ambition to double the size of its business organically by 2017.

The combined CALA and Banner business will directly employ over 600 people and have a turnover of more than £500m in its first full year with net assets of £200m.

Alan Brown, group chief executive of CALA, said: “We are delighted to have acquired such a high quality business which fits perfectly with CALA’s own market position and expansion plans.

“Banner has a deserved reputation as one of the finest luxury house builders in the UK and combining the two businesses will put us in the top 10 of UK home builders with significant growth potential.

“Both businesses build high quality homes, place a strong emphasis on customer service and have very similar cultures and I am tremendously excited about bringing together the best of both CALA and Banner in order to drive the enlarged group forward.

“Both CALA and Banner are trading strongly and, with a positive market backdrop, the ongoing support of our shareholders and a strong management team, the combined business is well placed to meet our long term growth plans.”