The £1.8 million deal will see Castleton take 100 percent of Deeplake and its proprietary comms software.
Castleton is the market leader for a the landlord and tenant communication niche.
Dean Dickinson, CEO at Castleton, said: “This strategic acquisition enables us to capitalise on the significant opportunities in the social housing market’s market shift towards digitalisation, building on the capabilities the group has already developed.
“Deeplake Digital adds scale, customers, skills, market knowledge and specific digital communication intellectual property and has a great reputation for delivering a quality product and service, evidenced by its high customer retention levels over the past 10 years.
“This acquisition provides additional cross-selling opportunities into Deeplake Digital’s customer base, in line with the group’s growth strategy.”
Castleton believes the deal will add £800,000 to its annual revenue, 80 percent of which will be recurring.
In total £49.5 billion worth of contracts was handed out by the public sector last year, with IT and telecoms accounting for eight per cent of this figure.
The construction industry saw the most public sector spending last year, with nearly £14 billion worth of contracts awarded (28 percent).
Softcat meanwhile features among the top 20 suppliers to local government, ranked 17th with an award value of £81 million.
Tussell said that the direct values of frameworks, such as G-Cloud, are not included in the report.