WaveDivision Capital, an investment company operated by the founder of Wave Broadband and several former executives, has teamed up with Searchlight Capital Partners to acquire the Northwest operations of internet and TV provider Frontier Communications for $1.35 billion. Frontier’s Northwest division includes 350,000 residential and commercial customers across Washington state, Oregon, Idaho and Montana.
Despite the similar names, WaveDivision and Wave Broadband are not related. Both were founded by telecommunications entrepreneur Steve Weed, who was CEO of Wave Broadband when it was acquired for $2.36 billion in 2018. Weed, along with several other executives at the company, departed following the acquisition.
“We are big believers in the Northwest’s future growth opportunities and that future runs on broadband,” said WaveDivision Founder Steve Weed, who founded Wave Broadband and served as CEO. “As the former leaders of another successful Northwest internet provider, Wave Broadband, we know what it takes to bring fiber and other advanced services to residential and business customers, give them choices, and keep them happy.”
WaveDivision’s leadership also includes Harold Zeitz and Wayne Schattenkerk, the former president and CFO of Wave Broadband, respectively. Despite leaving the CEO job after Wave Broadband was acquired, Weed remains on the company’s Board of Directors.
WaveDivision and Searchlight have formed a new company to operate the business under a different name. The name was not disclosed, but a spokesperson said it likely won’t include a Wave reference to avoid confusion with Wave Broadband.
The spokesperson downplayed competition between the new company and Wave Broadband, citing Comcast and Charter is its primary rivals. However, both Wave Broadband and Frontier offer broadband internet services in the Pacific Northwest, and both are looking to grow their presence and market share in the region.
Frontier’s Northwest operations were responsible for $619 million in revenue and $46 million in net profits for the year ending in March. Its services are available in a variety of areas throughout the region, including rural areas, cities outside Portland and Seattle, eastern Oregon and Washington and parts of Idaho and Montana.
In the interim, Frontier and WaveDivision said there won’t be any disruptions for existing customers or employees. The company plans to honor all commitments, keep current offices open and grow within the four states.
“Our plan is to invest further in our markets, specifically by extending fiber to more homes and businesses, to bring them the high speeds they want. Once the transaction closes, we will have more details to share,” Weed said.
In a statement, Wave Broadband representatives acknowledged the deal and that Weed is on the board of directors but noted that it is not involved and the transaction will not affect its customers. Wave and its parent company Radiate Holdings said they are focused on growing and delivering broadband services .
The deal is expected to close within a year and will have to get regulatory sign-off first. Shares in Frontier, which operates in 29 states, rose 10.4 percent following announcement of the deal.
Wave Broadband recently shook up its executive leadership and split operations into two divisions. The north division, which will service Wave Broadband’s Washington state customers, has offices in Seattle and Bothell, Wash., a city 15 miles northeast of Seattle that is also one of Frontier’s markets.
Wave Broadband was acquired in early 2018 by TPG Capital in a deal to form the sixth largest cable company in the U.S.
Editor’s note: Post updated with comments from Wave Broadband. Wave Broadband is a GeekWire sponsor