TPG-backed RCN buys broadband provider Wave for $2.37 billion
By Liana B. Baker May 22 (Reuters) – Private equity firm TPG Global LLC said on Monday it would buy Wave Broadband for £2.37 billion in a deal that creates the sixth largest U.S. cable operator at a time when demand for high-speed internet service is growing rapidly.
The deal combines privately-held Wave with RCN Telecom Services LLC and Grande Communications Networks, the broadband providers TPG bought earlier this year. TPG Capital Partner David Trujillo said in an interview that the deal fits in with his firm’s “picks and shovel” strategy of focusing on rising internet use. TPG has investments in music provider Spotify, car sharing services Uber Technologies and others.
“Whether it’s the number of devices, or increasing content consumption or the connected home, what it all comes back to is fast reliable broadband,” Trujillo said. The transaction is expected to close in the second half of the year. Headquartered in Kirkland, Washington, Wave has residential and commercial customers in the Sacramento and San Francisco markets as well as in Seattle and Portland, Oregon.
Oak Hill Capital, GI Partners and Wave’s management, including Chief Executive Steve Weed, acquired the company in 2012 from Sandler Capital Management. The value of that deal was £950 million, according to Moody’s. Weed will become a director of RCN when the deal closes.
TPG was advised by Credit Suisse and PJT Partners while its legal adviser was Cleary Gottlieb. Wave was advised by UBS and Wells Fargo. Reuters was first to report that TPG was nearing a deal to buy Wave for more than £2 billion. (Reporting by Liana B.
Baker in New York; Editing by Tom Brown)
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