Streamline, a management buy-out from Shell in 1993 which subsequently floated on the stock market in 1996, is 14 per cent owned by Terry Simpson, its chief executive, and 50 other managers and senior employees.
The acquisition will turn Jarvis into a pounds 1bn company with interests spanning rail, construction, road services and specialist building materials.
Streamline has four main businesses - road maintenance, road marking, roadside signs and special road services such as bus and cycle lanes and sleeping policemen.
The company has contracts to maintain road networks in eight shire counties and has also won three road maintenance contracts let by the Highways Agency. The maintenance agreements cover everything from repairing potholes to accident clearance and gritting and include looking after some of the busiest roads in London from the North Circular Road and Marylebone Road to the stretches of the A1 and M1 between the capital and the M25.
Mr Simpson, who will join the board of Jarvis, said that although road marking might seem like a simple business it involved a lot of technology. "There is more to a white line than meets the eye," he added.
Jarvis is paying for Streamline with cash and shares and has acceptances from shareholders holding a third of the equity which are binding even if a higher rival offer is made.
Jarvis, led by Paris Moayedi, has grown from a small construction group into one of the country's biggest transport maintenance companies. It snapped up five of the 13 British Rail maintenance and track renewal companies sold off at privatisation. Mr Moayedi said the Streamline deal would take it into Europe and the Far East and opened up the possibility of tendering for toll road management contracts.