TPG Capital, the global private equity platform of alternative asset firm TPG, is backing RCN Telecom Services’ acquisition of Wave Broadband for USD2.365 billion.
Currently owned by Oak Hill Capital Partners, Wave management and GI Partners, Wave is a regional broadband fibre company offering a full suite of high-speed data, video, and voice services to residential and business customers.
RCN and Wave will combine to create the nation’s sixth largest cable operator, with a diversified presence across seven of the top 10 cities in the US.
The transaction is expected to close in the second half of 2017, and is subject to customary closing conditions, including regulatory approvals.
Wave is a regional incumbent cable and broadband services provider reaching 673,000 homes and more than 1,800 unique commercial clients in Washington, Oregon, and California. The company has nearly 8,000 miles of owned fibre supporting its market-leading enterprise fibre business. Wave was founded in 2002 by Steve Weed, who will join RCN as a director upon the close of the transaction. Wave will continue to operate as a branded entity, headquartered in Kirkland, Washington.
“Since our founding, we have been committed to providing customers with the highest quality, most reliable, and fastest data services available,” says Weed. “Over the last several years we have accelerated our growth substantially by expanding from our heritage of residential broadband services into enterprise-grade fibre. Oak Hill and GI have been outstanding partners, and we are excited that our new partners, TPG and RCN, recognise the value of what we have created. We are eager to enter our next era of growth alongside them.”
In August 2016, TPG entered into definitive agreements to acquire RCN as well as Grande Communications Networks through separate transactions. The combination created a regional market leader in next-generation, high-speed data services for residential and business customers with a presence spanning the East Coast, Chicago, and Texas. The combination with Wave expands RCN’s footprint to the West Coast.
“Demand for high-speed broadband services is growing rapidly as digital content continues to proliferate,” says David Trujillo, partner at TPG Capital. “High-quality, reliable communications infrastructure is increasingly important, and the acquisition of Wave is a transformative addition that will allow RCN to provide broadband-related services in new and growing markets. We look forward to working with RCN and Wave management to serve even more residential and business customers across the country.”
“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 have created a market-leading broadband platform with national reach, broad capabilities and expertise, and exciting growth potential,” says Jim Holanda, CEO of RCN and Grande. “We look forward to working with the Wave team to further accelerate our combined growth.”
J Crandall, Benjy Diesbach, and Scott Baker represented Oak Hill Capital Partners on the Wave board of directors. Gregory VandenBosch represented GI Partners.
