Astound Broadband, the sixth largest cable operator in the United States, through its division Wave Broadband, today announced that it has acquired fiber provider Digital West. Specifically, Digital West is a provider of fiber optic connectivity and related services for thousands of business customers in California’s Central Coast region.
Astound Broadband, Wave Broadband and Digital West – Transaction Rationale
Wave Broadband’s addition of Digital West to its regional business operations and West Coast fiber network gives Digital West access to an expanded base of business connectivity and communication services. Indeed, Wave Broadband is already a significant fiber provider in California, with presence in the markets of Santa Maria, Lompoc, and Solvang. Therefore, Digital West’s footprint in California complements Wave Broadband’s business well. Specifically, Digital West operates in the markets of San Luis Obispo, Paso Robles, Pismo Beach, Grover Beach, and Morro Bay.
Digital West and its local team will continue to operate the business. Specifically, Tim Williams, Chief Executive Officer and Jeff Buckingham, President will be transitioning to Wave Broadband. Overall, Digital West will incorporate Wave’s fiber network, as part of Wave Business Solutions, which is the Commercial Fiber division of Wave Broadband. In turn, Digital West will be able to deliver additional communication services to its Central Coast business customers.
Wave Business Solutions’ offerings include enterprise and fiber products such as Dedicated Internet Access (DIA), Wide Area Network (WAN), cloud voice, Unified Communications as a Service (UCaaS), optical wavelengths up to 100 gigabits per second, and dark fiber. Indeed, Wave Broadband’s product suite accelerates the growth of fiber deployment to businesses, schools, government offices, and multi-unit residential buildings on the Central Coast.
Wave Business Solutions currently serves communities on the West coast including California, Oregon, and Washington. Indeed, the Digital West acquisition is an attractive fiber bolt-on for both Wave Broadband and Astound Broadband, its parent company.
Digital West – Overview
Digital West delivers fiber optic connectivity, colocation, cloud services, digital business applications and telephony to businesses. Based in California, Digital West serves commercial clients, including carriers, small businesses, and medium-to-large enterprise clients with fiber.
Notably, Digital West owns a metro fiber network, comprising 50+ fiber route miles around San Luis Obispo and Ventura Counties.
Astound Broadband and Wave Broadband – Overview
Astound is comprised of RCN and Grande, which were bought by TPG, a private equity firm, for $2.3bn in 2016. Subsequently, in 2017, TPG purchased Wave Broadband in a $2.4bn deal. Finally, in 2020, TPG acquired EnTouch Systems, an operator that serves 22k customers in the Houston area. Together, these companies form Astound Broadband which serves over 1 million customers with 23k miles of fiber. Astound’s top 6 markets by subscribers include Philadelphia, Chicago, Seattle, New York City, Boston, and San Francisco.
In November 2020, Stonepeak Infrastructure Partners, a private equity firm, agreed to acquire Astound Broadband from TPG. The deal was struck at an enterprise value of $8.1bn, equating to a 12.5x EBITDA multiple. The transaction will close in the second quarter of 2021.
