Private equity (PE) firm TPG Global LLC is nearing a deal to buy regional broadband operator WaveDivision Holdings LLC for more than $2 billion, including debt, people familiar with the matter said on Wednesday.
The deal would combine Wave with RCN Telecom Services LLC and Grande Communications Networks, the broadband providers that TPG already owns, the sources said. The merged company would be the sixth largest U.S. cable operator, at a time when demand for high-speed internet service is growing rapidly.
A deal could be announced as early as this week, said the sources, who asked not to be identified because the negotiations are confidential.
TPG declined to comment. Wave and its PE owners Oak Hill Capital and GI Partners did not respond immediately to requests for comment.
TPG acquired RCN and Grande Communications for $2.25 billion from another buyout firm, ABRY Partners, in a deal that closed this February.
The high-speed internet business has attracted new investment from PE firms in recent years, as consumers increasingly turn to the internet from cable to stream content, and businesses require more bandwidth for their data.
Wave is the latest in a string of deals in the sector. In April, U.S. cable mogul John Malone's Liberty Interactive Corp (QVCA.O) said it would acquire Alaska-based cable provider General Communication Inc (GNCMA.O) for $1.12 billion.
Headquartered in Kirkland, Washington, Wave has residential and commercial customers in the Sacramento and San Francisco markets as well as in Seattle and Portland, Oregon.
Wave has been heavily investing in its fiber network. The company said last fall it has 1,000 fiber construction projects underway.
With its fiber-rich network, Wave could generate more cash from high-speed data services for homes and businesses, credit rating agency Moody's said last August.
Oak Hill Capital, GI Partners and Wave's management, including Chief Executive Officer Steve Weed, acquired the company in 2012 from Sandler Capital Management. The value of that deal was $950 million, according to Moody's.
(Reporting by Liana Baker in Tel Aviv and Greg Roumeliotis in New York; Editing by David Gregorio and Jeffrey Benkoe)