The energy services company has bought water consultancy Morrel Consulting for up to £5.22m.

As part of its ambitious growth strategy, Leeds-based Spice bought the firm for an initial sum of £150,000, with another £5.7m payable depending on Morrel's performance over the next two years.

Birmingham-based Morrel has developed software which helps identify properties which are not being billed for water consumption, or are being under-billed.

The firm's software also analyses consumption data to identify leaks and under-recording meters.

Chief executive Simon Rigby said: "The acquisition of Morrel significantly enhances our distribution division's water service offering and moves us further up the value chain.

"Through combining our nationwide network of operatives with Morrel's software application, we are in a strong position to assist our utility customers in maximising their revenue streams.

"Against the current uncertain economic climate, we believe that this is an ideal time to bring this innovative and value added solution to our clients. There are also strong synergies with the work currently being undertaken by our supply division." Spice recently joined the FTSE 250 following rapid expansion over the past year. The group plans to double the size of its business over the next five years.

It aims to grow the business by 20 per cent a year, through a 12 per cent increase in organic growth, a four per cent rise in cross selling and a four per cent rise in further acquisitions.

Last month Spice said it was on the hunt for acquisitions following a £50m rights issue, which gave it a war chest of £80m to £90m to spend on takeovers.

Morrel was formed by Hargurdial Singh Rai, who is staying with the business. Morrel has turnover of about £70,000 and operating profits of £50,000. It had net assets of about £10,000.