Caledonian Industrial’s rail plant division has been bought by Story Contracting.
The move will extend Story’s national reach to Scotland, where the company plans to relocate.
Story has sites in Carlisle and Normanton in west Yorkshire. With the addition of the Edinburgh base, the company said its pant fleet will double to 50 vehicles.
The group added it will invest “significantly” in the fleet to improve safety, in response to ongoing concerns over plant reliability in the industry.
Story plant director Tony Cook said: “The deal also means the size of our fleet doubles overnight, so the range of machinery and vehicles on offer to our customers is among the best in class.
“However, we are not complacent. We have committed to a programme of investment in the fleet and we recognise the need to expand and modernise the Edinburgh base.”
The division will immediately trade under the Story name and will see 17 Caledonian staff transfer over to the group.
Caledonian’s rail division clients include Transport Scotland and First ScotRail.
The details of the deal were not disclosed.