The deal creates a broad-based asset management business that will employ around 650 staff and turnover £60m a year.

Fastflow CEO and owner, Neil Armstrong, said of the deal:  “This provides us with an excellent opportunity to diversify and grow our business.

“While the work undertaken by Fastflow in the utility sector is quite different, the two organisations are founded on very similar principles and employ similar working practices, making this deal a great fit.”

He added: “It is my belief that both organisations will learn from each other to become even stronger players in their sectors.”

The Fastflow Group, based in Washington, Tyne and Wear, was created when Armstrong acquired the business from Northumbrian Water in 2005.

Its pipeline services division works for Northumbrian Water, Scottish Water and Anglian Water.

DW Contractors has depots in London and Reading carrying out maintenance, repair and refurbishment services for housing associations, London councils and NHS trusts.

All 300 DW Contractors staff will transfer to Fastflow.

David Exley, who founded DW Contractors in 1986 and grew it into a £25m turnover operation, added: “It has been a tough decision to make but I think it is the right time for me to move on and I know I am leaving the business and the team in excellent hands.”