The distressed sale continues the consolidation in the European hosting market following a flurry of 2004 deals in which Freenet bought Tect’s hosting operation, Host Europe PLC was bought by Pipex, NetBenefit purchased Easily Ltd., and Lycos Europe bought United-Domains of Munich.

Claranet originated in the UK in 1996 and has expanded into France, Spain, and Germany. The company provides managed connectivity and web hosting services, e-commerce, leased lines, DSL, Virtual Private Networks and security products.

“Following our past acquisitions on the continent and last year’s acquisition of VIA’s UK operations, Claranet is consolidating its position as a leading European provider of communication services to business,” said Claranet’s Chief Executive Officer Charles Nasser said in announcing the purchase agreement.