Independent cable and broadband services provider WaveDivision Holdings has completed a $1.052 billion recapitalization, swapping out old investors for some fresh new ones.
Launched in late 2001 to acquire and upgrade cable and fiber-optic network assets in the Pacific Northwest, Kirkland, WA-based WaveDivision took on Sandler Capital in 2002 as its equity partner. Ten years and multiple debt raises later, “it was kind of the end of the rope for Sandler,” WaveDivision founder and chief executive Steve Weed tells me. “They had been investors in it for 10 years and we needed to re-cap them out… because the company is doing great and we want to keep going.”
WaveDivision’s management increased its equity stake from 10 percent to 15 percent with new private equity investors Oak Hill Capital Partners and GI Partners buying out Sandler. Oak Hill is the majority owner, while GI’s stake is similar in size to that of WaveDivision management. In addition, the company recapitalized its debt with new financing from Wells Fargo, Deutsche Bank, and other banks.
Weed would not disclose the split between debt and equity in the deal. He does say that the closely held company is and has been profitable, funding acquisitions out of cash flow. WaveDivision will bring in about $300 million this year, up from about $90 million in 2006.
The company competes for residential cable and broadband Internet business in the suburbs surrounding Seattle, Portland, San Francisco and Sacramento. It plans to continue investing heavily in its commercial business, building and buying “huge amounts of fiber assets” in West Coast metropolitan areas to provide enterprise customers with an array of network and communications services, according to Weed.
The company, which does business under names including Wave Broadband and Astound Broadband, has 800 employees and nearly 400,000 customers.
