Paragon turned over £22m in 2011 and made a post-tax profit of £600,000. It will now become part of Interserve’s construction division.

Since being set up in 2005, the firm has completed 350 projects with a combined value of more than £100m.

Most of the firm’s contracts are below £1.5m, specialising in the financial market in London.

The acquisition provides Interserve with access to the high-end re-fit market, which has maintained its value during the downturn and which offers further opportunities as economic conditions improve.

Ian Renhard, managing director – Construction said: “This acquisition enhances our existing fit-out and interior services and provides us with additional revenue, most specifically, in the London and south-east fit-out market.

“All indicators show that the London refurbishment market performed well throughout the last five years and this acquisition puts us in a good position to take advantage of expected growth and provides the opportunity to develop services to new and existing clients across the Interserve Group.”