Private equity firm TPG Capital announced plans Monday to combine its subsidiary RCN Telecom Services, LLC with Wave Broadband as part of a $2.365 billion transaction that would create the sixth-largest cable system operator in the U.S. Last August, TPG acquired both RCN and Grande Communications Networks through separate transactions which enabled TPG to establish itself as a leader in the regional market for residential and business broadband services throughout the East Coast as well as in Texas and Chicago. Wave, meanwhile, offers a full suite of high-speed data, video and voice services across a regional cable and broadband network reaching 673,000 homes and more than 1,800 commercial clients in the states of California, Washington and Oregon. In addition to expanding the RCN footprint to the West Coast, the deal would provide the combined entity with a diversified presence across seven of the top ten cities in the U.S. The transaction also encompasses more than 8,000 miles of fiber network lines which are owned and used by Wave in support of its market-leading enterprise fiber business. Contingent upon receipt of required regulatory approvals, the parties anticipate completion of the transaction during the second half of 2017.
In a press release confirming the deal, Steve Weed, the founder and CEO of Wave, maintained that, “over the last several years, we have accelerated our growth substantially by expanding from our heritage of residential broadband services into enterprise-grade fiber.” Declaring, “we are excited that our new partners, TPG and RCN, recognize the value of what we have created,” Weed said, “we are eager to enter our next era of growth alongside them.” TPG partner David Trujillo, meanwhile, described the Wave acquisition as “a transformative addition that will allow RCN to provide broadbandrelated services in new and growing markets,” asserting: “we look forward to working with RCN and Wave . . . to serve even more residential and business customers across the country.”