The LSE-listed company says it will pay approximately £91 million for the concern, subject to shareholder approval.

Of the consideration, £57.9 million (or £43.3 million net of expenses) will be raised through an underwritten placing of shares. The remainder will be funded through existing bank facilities.

The purchase price includes funds of £40.6 million to cover the repayment of National Britannia’s debts and other transaction-related costs.

Connaught claims that National Britannia’s focus on ‘white collar’ compliance services (for example, inspection, training and the provision of information) will complement its existing ‘blue collar’ business.

Chairman Mark Tincknell comments: ‘National Britannia is a fast growing and very well managed business in a high-growth market. This is an attractive, fragmented market for outsourced compliance services which we estimate to be worth over £4.6 billion per annum.’

National Britannia, whose turnover for the year ending October 2006 was £28.2 million, is being sold by private equity house Lyceum Capital. Lyceum’s remaining investments are IT services business Fox IT, social housing maintenance specialist SPI, and outsourced fleet management company Leasedrive VELO.