TPG Capital, the global private equity platform of alternative asset firm TPG that has identified communications firms as a good investment, says it has its sights on another. The company says it will supply the cash to enable its RCN Telecom Services, LLC holding to buy Wave Broadband for $2.365 billion from Oak Hill Capital Partners, Wave management, and GI Partners. The combination of RCN and Wave create the nation's sixth largest cable operator, according to TPG, and will serve 7 of the top 10 cities in the U.S. The transaction is expected to close in the second half of 2017.
Wave is an incumbent cable and broadband services provider that serve 673,000 homes and more than 1,800 commercial clients in Washington, Oregon, and California. The company has significantly expanded its fiber footprint in recent months (see, for example, "Wave funds fiber network expansion") and now has nearly 8,000 miles of owned fiber. Wave founder Steve Weed will join RCN as a director upon the close of the transaction. Wave will continue to operate as a branded entity, headquartered in Kirkland, WA.
Wave management has been thought to be looking for an acquisition partner for some time (see "Wave acquires Cascadelink, may be for sale itself").
The deal marks TPG's third in the communications space, following agreements signed in August 2016 to acquire RCN as well as Grande Communications Networks LLC (see "") Those deals created holdings with network assets and residential and business customers along the East Coast, along with Chicago, and Texas. The new acquisition will create a footprint for RCN on the West Coast.
"Demand for high-speed broadband services is growing rapidly as digital content continues to proliferate," said 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."
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