Internet service provider Tiscali has invested £210m to acquire the broadband and voice assets of UK rival Pipex, increasing its broadband customer base by around 570,000.
The acquisition also gives Tiscali around 430,000 new voice customers.
The sale is part of a strategic review which Pipex announced in March, initially attracting interest from BT, Sky and Virgin Media. Most bidders later dropped out of the auction.
Pipex’s broadband and voice division generates around £230m in sales, and £14m in profits.
Following the disposal, Pipex will focus on its remaining web hosting, business services and Wi-Max wireless services - areas of significant business growth. The commercial launch of Pipex Wireless is scheduled for later this year.
Pipex has signed deals with Intel and Nokia Siemens Networks, and has been running trials in Milton Keynes and Warwick to develop its Wi-max service.