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Lovell, the Staffordshire-based affordable housing arm of the Morgan Sindall group, has bought the majority of Connaught Partnerships' contracts and related assets. The deal was made after Connaught announced that it had fallen into administration earlier this week. The contracts were sold for £28m, and approximately 2,500 employees will transfer to Lovell as part of the deal.

Connaught Partnerships has revenue of approximately £300m per year.

The deal, which was completed late last night, will enhance Lovell’s market leading position in the affordable housing sector. The new contracts are expected to generate approximately £200m of additional annual revenue, split broadly between response maintenance contracts and Decent Homes planned maintenance contracts.

Richard Heis, restructuring partner at KPMG and joint administrator, said: “It has been a considerable achievement to agree such a substantial transaction in such a short amount of time after our appointment, which reflects the commitment of Morgan Sindall and the efforts of Connaught Partnerships’ management and staff to secure the deal.

“We are continuing to seek to novate the remaining contracts to other providers and remain hopeful that more staff will transfer as part of this process.”

John Morgan, executive chairman of Morgan Sindall, said: “This is a step change for Lovell. The acquisition significantly increases the scope and scale of our planned and reactive maintenance activities and further develops our market leading position.”

“Our focus now will be to ensure a smooth handover of the contracts and to minimise disruption to essential maintenance services. We look forward to working with our new and existing clients and to provide them with a high level of service, as well as protecting jobs on the contracts we are acquiring.”