Wave Broadband may have to change its name to Tsunami.
The Kirkland-based company is announcing today that it has raised $1.052 billion to accelerate the expansion of its broadband network on the West Coast.
That’s not all new money, though. It’s a recapitalization of the company, which has about $350 million in debt. The $1 billion includes funding from new investors Oak Hill Capital and GI Partners and debt financing led by Wells Fargo and Deutsche Bank.
Oak Hill and GI acquired a majority stake in Wave in June, buying out its previous backer, Sandler Capital Managment.
The recapitalization gives Wave plenty of capital to expand its broadband and cable services to business and residential customers in Washington, Oregon and Idaho. It also enables the company to bulk up with acquisitions.
Wave will continue providing cable and broadband services in communities where it has franchises, including parts of Seattle and its suburbs. Its big focus now is building up the business offerings, which aren’t limited by franchise boundaries.
Operating quietly in the shadow of the region’s larger telecom companies, Wave has steadily built a profitable business providing cable and broadband services in the Puget Sound area, San Francisco, Sacramento and Portland.
Chief Executive Steve Weed (pictured) is a longtime telco executive who started Wave in 2001. He built the company largely through acquisitions of cable and broadband operations, including distressed companies that sold assets for less than they cost to build. A recent deal was the January purchase of Broadstripe’s operations in Washington and Oregon.
Wave now has about 400,000 customers and 800 employees, including about 200 at its Kirkland headquarters. By employees, it’s comparable to Bellevue-based Clearwire.
Wave sales have been growing 40 to 50 percent over the past three years and should reach $300 million this year, Weed said.
“On the business side we’ve got a superior product to the big telcos. We’re beating them on rates and a much better service experience,” he said.
As part of its refresh, Wave has been hiring new marketing and operations executives from other broadband companies. It also promoted its chief operating officer, Steve Friedman, to president.
Partnering with cities to offer municipal broadband is a possibility.
“I think we would be interested in doing that,” Weed said, “but it’s not on my short-term to-do list.”