THE UK's largest van hire group Northgate has paid £5.7m for a fleet management company.

The move comes only weeks after Northgate, which is based in Darlington, announced that it had experienced its toughest six months in history, and hinted at moving into fleet management in an effort to increase its profitability.

It has bought Fleet Technique Limited (FTL), based in the Team Valley, Gateshead, and its IT software Fleet Dynamix. Chief executive Steve Smith said the acquisition formed part of Northgate's strategic plan to expand the vehicle solutions operation of the company, given that organic growth in fleet size in the UK is likely to slow.

He said the new business would take some of the management responsibilities from companies with large fleets of vehicles.

He said: "Fleet management takes away the hassle of having to buy, sell and maintain vehicles - companies can outsource that to us, while retaining ownership of their fleet.

"We have been looking for a small, niche fleet management company for some time and FTL is a great business. We have basically bought their expertise and IT system."

FTL, a vehicle maintenance and driver support agency, was established 14 years ago and manages about 15,000 vehicles, through partnerships with 6,500 dealers nationwide.

Its IT system, Fleet Dynamix, is a management software package, which includes links to the DVLA for vehicle verification and has a track-and-trace module.

The management team will stay on to run FTL, with Aaron Brown as managing director. None of the 45 jobs are under threat.

Founder Robert Hodds, who is leaving the company, said: "The fit between Fleet Technique and Northgate is a good one. Northgate is keen to grow the business and has a good track record."

Northgate, which buys vehicles, rents them out and then sells them on, has a fleet of 52,400 vans, trucks and cars in the UK.

In the half year to October 31, group pre-tax profits were £28.3m, from revenues that rose 5.9 per cent to £176.9m.

In August last year, the company expanded further into Europe when it bought 49 per cent of Rent Record, in Spain. It expects to complete the acquisition of the remaining 51 per cent of the business in April or May.