Transactions

TPG to Buy Wave Broadband for $2.36B

Private equity firm adds overbuilder to earlier RCN, Grande deals 5/22/2017 12:00 PM Eastern

TPG Capital has agreed to purchase Seattle-based Wave Broadband in a deal valued at about $2.36 billion.

News that a deal was close was first reported by Reuters.

TPG has been on an acquisitions tear of late. In August it paid $2.25 billion for Grande Communications and RCN

Wave’s owners Oak Hill Capital Partners and GI Partners had hired investment bankers in April to seek out a buyer for the company. At the time they were reportedly seeking $2 billion.

Wave has about 138,000 video customers in Washington State and Oregon – including Seattle and Portland – and overbuilds Comcast in parts of San Francisco. The company has concentrated on its broadband service and has recently focused on purchasing fiber and data companies to boost its high-speed data presence, including Seattle-based CascadeLink.

In September the company raised about $125 million to continue an ambitious fiber buildout geared toward serving enterprise customers. 

Oak Hill and GI Partners teamed up with Wave management – including founder and CEO Steve Weed – to buyout long time backer Sandler Capital Management in 2012 in a deal some valued at about $950 million.

Wave said the new deal will create the sixth largest internet and cable operator in the country. The transaction is expected to close in the fourth quarter of 2017. Wave will be combined with TPGs’ RCN operations, according to the announcement.

“Over the last several years we have accelerated our growth substantially by expanding from our heritage of residential broadband services into enterprise grade fiber,” said Wave founder and CEO Steve Weed in a statement. “We are excited that our new partners in TPG and RCN recognize the value of what we have created, and share our passion for creating happy customers – we are eager to enter our next era of growth alongside them.”

Wave will continue to operate as a branded entity headquartered in Kirkland, Wash., serving business and residential customers in Washington, Oregon, and California. RCN provides similar services as Wave along the East Coast and in Chicago; Grande operates throughout Texas.

The company said it will continue to grow its residential customer base while also accelerating expansion of its fast-growing commercial and enterprise business segments that have driven much of its recent momentum.

“At RCN and Grande, we pride ourselves on providing the best products, best service, and best value to our customers. Through our partnership with TPG, and by expanding our footprint with Wave, we are creating a market-leading broadband platform with national reach, broad capabilities and expertise, and exciting growth potential,” said RCN and Grande CEO Jim Holanda in a statement. “We’ve known the team at Wave for many years, and their focus on delivering value to their customers aligns perfectly with ours.”

Wave management will remain significant investors, partnering with majority owner TPG. Wave’s CEO, Steve Weed, will join the combined company’s Board of Directors.

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