The deal is rumoured to be worth £15m-£20m to the McNicholas family and makes Kier one of the leading UK utility services contractors.

McNicholas employs nearly 2,000 staff and works across the UK from its headquarters in Elstree for clients that include Virgin Media, Network Rail and UK Power Networks.

Haydn Mursell, chief executive of Kier said: “The acquisition of McNicholas builds on Kier’s strategy to accelerate growth and hold leading positions in its chosen markets.

“It is a highly complementary addition to our utility services business and enhances our presence in the power, rail and telecoms markets, with its long-standing client relationships.

“We are delighted that Barry and his team will remain with Kier to continue the growth and development of the business.”

Barry McNicholas, chief executive of McNicholas, said: “Our business has been servicing the rapidly growing telecommunications industry for over 50 years and our expertise and knowledge has given us leading positions in new sectors such as gas, power, rail and civil engineering.

“We are excited by the opportunities that joining a larger group gives our teams to expand and grow.

“It also provides our clients access to a broader range of capabilities.

“I and the team look forward to joining Kier and playing a role in delivering the Vision 2020 strategy.”