Yesterday there was some significant fiber changing hands in the MSO space. RCN Telecom Services has announced that it will be combining with Grande Communications and Wave Broadband in a deal that will create the 6th largest MSO and span three key regions.
Last summer, TPG acquired both RCN and Grande from ABRY Partners, and was pretty open about having an appetite for more. I didn’t foresee Wave being the next target, but it makes plenty of sense.
RCN brings to the table its footprint in the northeast and Chicago, while Grande’s specialty is down in the Texas region. Meanwhile, Wave has focused heavily on the northwest, stretching along the coast from north of Seattle down to the San Francisco Bay area. Wave has been rather acquisitive itself over the years as it added muscle throughout the region. When all under RCN’s banner, the assets well stretch 17,000 route miles and pass some 2.7M residential homes, serving 925K business and residential subscribers.
All three companies bring a pretty substantial business/enterprise footprint to the table, although they don’t quite make a national fiber footprint just yet. TPG will probably be moving to fill in a few more of those gaps if the opportunities arise. I wonder what similar assets might be available in, say, the southeast, or in southern California. They might also need some longhaul glue to hold it all together at some point. Hmmm…
The total value of the transaction was given as $2.37B, for which TPG is providing the financial requirements.
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