Wave Broadband Tests Deal Waters

Wave Broadbandis dipping its toes in the deal waters
once again, seeking out a financial partner that could invest
as much as $1 billion in the Northwest centered MSO.

Sources confirmed a late January Bloomberg
report that Wave Broadband,
which has about 325,000 customers in
Washington state, Oregon and Northern
California, has quietly been sending out
feelers to prospective partners.

This isn’t the first time Wave has tested
the deal waters. Back in 2010, it hired Waller
Capital Partners and RBC Capital Markets
to seek a potential partner. But as the capital
markets tightened, it pulled its systems
off the block.

Offi cials at Waller and RBC Capital declined comment.
Wave has been a strong performer — it generates about
$100 million in annual cash flow, according to people familiar
with the company — and has room for growth
as some systems have only recently been upgraded to
broadband service. While its systems are mainly adjacent
to Comcast — in the Seattle and Portland, Ore., suburbs
— most observers believe private-equity players are
the most likely suitors.

Sandler Capital was an early backer of Wave and
its founder and CEO, former Millennium Digital
Media executive Steve Weed, in 2003 and owns
about 90% of its equity. While Wave would not reveal
how much Sandler invested initially, the
cable company raised about $70 million in initial financing
in 2003, including about $32.5 million in equity.
Weed grew Wave through a mixture of deals — he bought
Northland Cable, Avenue Cable and systems from Charter
Communications and Knology in the span of about four
years — and organic growth. Weed has said in the past
that the company would like to continue on that path.

In August, Wave purchased systems with about
60,000 subscribers and 103,000 homes passed in
Washington and Oregon from Broadstripe, for about
$32 million.


Headquarters: Kirkland, Wash.

Total Subscribers: about 325,000

Locations: Western Washington, Oregon, Northern California
(Sacramento and San Francisco Bay area)

SOURCE: Wave Broadband