TPG Capital acquired RCN and Grande Communications Networks in August 2016, and is now leading the acquisition of Wave. The transaction is expected to close in the fourth quarter of the year, Wave said in a press release.
Wave, which is based in Kirkland, Wash., will keep its name and continue to expand on the West Coast. Wave has more 7,000 miles of metro fiber across Washington, Oregon and California. In an interview with GeekWire, Wave CEO Steve Weed, explained that very little will change for Wave customers.
“For Wave, everything is going to be business as usual, but now we have solved our funding goals for the foreseeable future,” Weed said.
The acquisition represents the third time in company history that Wave has brought in outside funding. In 2012, Oak Hill Capital and GI Partners led a round of $1.05 billion. In 2015, Wave raised $130 million in a corporate bond to build out its fiber network. That was followed by a $125 million add-on to that round last year.
Wave needs to raise these big sums to finance the expansion of its fiber network. Weed said the company spends $100 million annually on construction of the network.
RCN CEO Jim Holonda and Weed are friends, and the two companies have shared best practices in the past. So when RCN heard that Wave was in the market to raise more capital, the two companies got to talking.
“They’ve been to our offices, and we’ve been to their’s, so we are sort of friends in the business. As part of the process, we started having discussions around maybe we should combine these entities instead of staying separate.”
Following the acquisition, Wave will continue to grow its residential customer base while also accelerating expansion of its fast-growing commercial and enterprise businesses.
RCN provides similar services to Wave, along the East Coast and in Chicago, and Grande operates throughout Texas.
The combined headcount of the three companies will be about 3,500. Wave has more than 1,400 employees, approximately 450 of whom work out of its Kirkland headquarters. Last year, Wave announced plans to double the size of its Kirkland headquarters by moving into the new Kirkland Urban project in 2018.
The companies will spend the next few months figuring out how to best leverage their respective strengths. Wave management will remain significant investors, and Weed will join the combined company’s Board of Directors.
Wave is no stranger to acquisitions, as it has been on the buying end 22 times since it was founded in 2003.