I’ll be honest, I’d never heard of WaveDivision Holdings until this week when a longtime Seattle area PR veteran reached out to me about the Kirkland company with this pitch.
“I am doing some work with a Seattle-area company that has very quietly grown to 800+ employees, is profitable and has a significant (hundreds of millions) funding announcement set for Thursday morning.”
Well, that’s one way to grab a reporter’s attention.
And now here’s the news. WaveDivision, which offers cable TV, phone and broadband Internet service to business and residential customers along the West Coast, today is announcing that it has raised $1.052 billion from Oak Hill Capital and GI Partners, including new debt financing from Wells Fargo and Deutsche Bank. As part of the new financial arrangement, existing management has boosted its stake in the company from 10 percent to 15 percent.
A portion of the funding will be used to cash out an existing private equity firm, Sandler Capital, recapitalizing the profitable company and setting the stage for a new phase of growth.
The company declined to say how much new cash is flowing onto the balance sheet. But, nonetheless, that’s a huge amount of funding, money that will be used to help the 10-year-old company expand residential and business broadband and cable service on the West Coast.
Wave has been around for a long time, and it is an amalgamation of cable and fiber assets from the likes of Charter, RCN and, most recently, a deal to acquire assets from Black Rock Cable. In other words, the company has been pieced together over the years through a series of more than 14 acquisitions, including some bankrupt properties. With the cash infusion, more acquisitions could occur in the future.
Why such a low profile?
That’s just the way it has worked out. In an interview with GeekWire this week, CEO Steve Weed laughed when asked about the lack of a PR strategy, noting that he really hasn’t done any sort of media outreach since the mid-1990s when he worked at one of the region’s first providers of broadband Internet service.
“That’s been by design,” said Weed when asked about the low public profile of Wave. “Our customers know who we are, and they like us. The problem is, unless you live where we own the network, you are not going to get the service.”
But, with the new cash infusion, that may change.
Wave now boasts 800 employees and 400,000 cable, phone and Internet customers in the communities surrounding Seattle, Portland, San Francisco and Sacramento. (Places like Whidbey Island and Gig Harbor) In each of those markets, Weed says it is one of the largest owners of fiber, operating under the brands Wave Broadband/Wave Business Solutions and Astound Broadband/Astound Business Solutions.
It is on pace to pull in about $300 million in revenue this year.
Wave has started to move deeper into business Internet services in recent years, taking on the likes of Comcast, Verizon and CenturyLink. Weed likes his chances against those companies, even though it is certainly not as well known as the “big telcos.” In many respects, he said they are comparable to competitors, oftentimes exceeding the speed and reliability of the likes of Comcast or CenturyLink
“There’s a huge amount of fiber assets that we’ve acquired, and about three or four years ago we made it a goal to provide the kind of service to our enterprise/business customers like we did with our broadband residential,” said Weed, the former chief operating officer of Summit Communications. “We’ve been growing tremendously, and we are looking to expand that side of our business.”
Unlike some large telecommunications companies, Wave will build out its fiber to existing businesses, making the investment of digging trenches and laying fiber. That’s not a cheap proposition, with Weed noting that they “still have to build fiber to the business” from the core network.
“Depending what their needs are, we can build it out to their location, and we do that all day. That’s part of what we are spending our money on is companies that want a fiber-based solution … We’ve got fiber all over the place.”
Given the company’s fiber assets, Weed said that they see tremendous opportunities as it relates to their business customer expansion. “That’s the area where we see the biggest growth, and that’s where are are going to focus our investment,” he said.
Wave has been bolstering its team in recent months, including the addition of Tim Klinefelter as executive vice president of broadband services; Patrick Knorr as executive vice president of IP and business services; and Colette Jelineo as chief marketing officer (Formerly vice president of marketing with Cox Communications).