Cable & Wireless (C&W) is buying the bulk of Exodus in a deal worth £696 million sterling.
It will acquire Exodus Group's US, Japanese and European customer contracts, as well as the Exodus brand name. But C&W says it will need to pump £175 million into Exodus to make the business break even.
US-based Exodus was once the world's largest web-hosting company, with a peak market value of £21 billion, but it filed for Chapter 11 bankruptcy protection two months ago.
In May, C&W agreed to buy Digital Island - a similar, but smaller, Internet services company - for £238 million.
C&W chief executive Mr Graham Wallace said: "This acquisition meets our key investment criteria of value, strategic fit, strong management and high-quality products, service and customer base".
C&W is buying 30 data centres run by Exodus, including 26 in the US and two in London. The US firm runs and services websites for clients including Vodafone, General Electric and MSN Hotmail.
Earlier this month, Cable & Wireless reported a sharp drop in full-year profits from £537 million to £83 million before one-off costs. It also announced plans to return a large slice of its £4.7 billion cash pile to shareholders.
It plans to buy back up to 15 per cent of its shares and offer remaining investors a special 11.5p per share dividend, a move that could cost up to £1.7 billion.
PA