TPG pays $2.4bn for west coast fibre-optic provider

The firm said it plans to merge Wave Broadband with a company it acquired last August to make the sixth largest cable operator in the US.

TPG Capital has expanded its reach in the US fibre-optic market to the west coast with the $2.4 billion acquisition of Wave Broadband.

The firm, the private equity arm of alternative asset manager TPG, purchased Wave from Oak Hill Capital Partners, GI Partners and Wave's management. TPG said it plans to merge Wave with a telecoms business operating on the east coast it purchased last August.

Founded in 2002, Wave provides high-speed fibre-optic internet to 673,000 homes and 1,800 commercial clients in Washington, Oregon and California, operating nearly 8,000 miles of fibre.

Its merger with RCN Telecom Services, which formed last year through TPG's purchase of RCN and Grande Communications Networks for a combined $2.25 billion, will create the sixth largest cable operator in the US. Steve Reed, Wave's founder, will join RCN as a director when the transaction closes in the second half of this year.

“Demand for high-speed broadband services is growing rapidly as digital content continues to proliferate,” TPG partner David Trujillo said. “The acquisition of Wave is a transformative addition that will allow RCN to provide broadband-related services in new and growing markets.”

TPG has been active in the telecoms industry outside the US as well. Last October, the firm partnered with north Asian buyout firm MBK Partners to acquire Wharf T&T for HK$9.5 billion ($1.22 billion; €1.09 billion). Wharf T&T has an extensive fibre-optic network covering approximately 90 percent of Hong Kong's commercial market, with a portfolio of local data connectivity and ICT services.