RCN will acquire Wave Broadband for $2.365 billion, creating the sixth largest cable company in the U.S.
The deal is backed by private equity firm TPG, which invests in RCN. Wave Broadband is currently owned by Oak Hill Capital Partners, Wave management, and GI Partners.
Wave is a regional broadband fiber 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 presence across seven of the top ten cities in the U.S.
The transaction is expected to close in the second half of 2017.
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 fiber supporting its enterprise fiber 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.
In August 2016, TPG entered into definitive agreements to acquire RCN as well as Grande Communications Networks LLC (Grande) through separate transactions. The combination created a regional market leader in 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.
This the second broadband consolidation transaction this year for Oak Hill Capital Partners, which also owns regional broadband provider FirstLight Fiber. As CivSource reported earlier this year, FirstLight acquired New York-based Finger Lakes Technology Group. The deal gave FirstLight a significant presence in the Northeast and furthered consolidation of smaller providers in the region.
The Finger Lakes Technology Group transaction will merge FLTG’s privately owned fiber optic network, which spans nearly 2,500 route miles in New York state and Pennsylvania, with FirstLight’s more than 9,500 route-mile fiber network. FirstLight will offer increased fiber density in the Upstate New York area, and expand its services in the Northern Pennsylvania region.
FirstLight announced similar transactions with Oxford Networks and Sovernet Communications last year.
Other investment firms including Novacap, Bank Street Capital Partners, and Riverside Partners are also minority owners in FirstLight, having retained partial ownership stakes following the Oxford and Sovernet acquisitions.