Birmingham recruitment group Capital Outsourcing has acquired a Yorkshire rival in a £7 million deal.

The city centre firm has bought Qualtech Resourcing, a West Yorkshire-based recruitment consultancy specialising in engineering, technical, manufacturing, construction and commercial recruitment, predominantly in the north of England.

The acquisition, completed wth support from a £2.4 million funding deal from HSBC, will add 31 new clients to its roster.

Capital Outsourcing said it projected the expansion would add £10 million to its annual turnover as it sought to expand into the north.

Owner Richard Sobol said: "Qualtech Resourcing very much mirror what we do here at Capital - they were an ideal fit for us as we look to expand and we are confident they will make a great addition to our business.

"This acquisition will enable us to firmly establish our northern offering and provide seamless entry into new markets, which have the potential to provide future growth opportunities."

Markus Keller, HSBC's area director for corporate banking in Birmingham, added: "Capital Outsourcing Group is a dynamic business, keen to build upon its strong foundations in the Midlands.

"The funding provided by HSBC has helped Capitol's expansion into the north, putting them a step closer to achieving its goal to become one of the leading suppliers of temporary and contract staff in the UK within the next five years."

Birmingham-based accountancy practice Michael Dufty Partnership provided the lead advisory role for the acquisition and assisted in preparing the funding package for presentation to HSBC.