Portfolio activity / May 22, 2017

Oak Hill Capital Partners to Sell Wave Broadband for $2.365 Billion

Combination creates the sixth largest cable company in the U.S. and expands a robust high-speed broadband services platform

Transaction marks third addition to the platform, following TPG’s investment in RCN and Grande

Kirkland, Washington, Fort Worth, Texas, and San Francisco, May 22, 2017

TPG Capital, the global private equity platform of alternative asset firm TPG, announced today that it is backing RCN Telecom Services, LLC (RCN), a nationwide broadband service provider controlled by TPG, to combine with Wave Broadband (Wave) for $2.365 billion. Currently owned by Oak Hill Capital Partners, Wave management, and GI Partners, Wave is a regional broadband fiber company offering a full suite of high-speed data, video, and voice services to residential and business customers. RCN and Wave will combine to create the nation’s sixth largest cable operator, with a diversified presence across seven of the top ten cities in the U.S. The transaction is expected to close in the second half of 2017, and is subject to customary closing conditions, including regulatory approvals.

Wave is a regional incumbent cable and broadband services provider reaching 673,000 homes and more than 1,800 unique commercial clients in Washington, Oregon, and California. The company has nearly 8,000 miles of owned fiber supporting its market-leading enterprise fiber business. Wave was founded in 2002 by Steve Weed, who will join RCN as a Director upon the close of the transaction. Wave will continue to operate as a branded entity, headquartered in Kirkland, Washington.

“Since our founding, we have been committed to providing customers with the highest quality, most reliable, and fastest data services available,” said Steve Weed, Founder and CEO of Wave. “Over the last several years we have accelerated our growth substantially by expanding from our heritage of residential broadband services into enterprise-grade fiber. Oak Hill and GI have been outstanding partners, and we are excited that our new partners, TPG and RCN, recognize the value of what we have created. We are eager to enter our next era of growth alongside them.”

In August 2016, TPG entered into definitive agreements to acquire RCN as well as Grande Communications Networks LLC (Grande) through separate transactions. The combination created a regional market leader in next-generation, high-speed data services for residential and business customers with a presence spanning the East Coast, Chicago, and Texas. The combination with Wave expands RCN’s footprint to the West Coast.

“Demand for high-speed broadband services is growing rapidly as digital content continues to proliferate,” said David Trujillo, Partner at TPG Capital. “High-quality, reliable communications infrastructure is increasingly important, and the acquisition of Wave is a transformative addition that will allow RCN to provide broadband-related services in new and growing markets. We look forward to working with RCN and Wave management to serve even more residential and business customers across the country.”

“At RCN and Grande, we pride ourselves on providing the best products, best service, and best value to our customers. Through our partnership with TPG, and by expanding our footprint with Wave, we have created a market-leading broadband platform with national reach, broad capabilities and expertise, and exciting growth potential,” said Jim Holanda, CEO of RCN and Grande. “We look forward to working with the Wave team to further accelerate our combined growth.”

“As we continue to grow our platform, our core objective remains the same: To deliver exceptional service to our customers and outstanding results for our investors,” said Steve Simmons, Chairman of RCN and member of the Cable Hall of Fame. “This combination equips RCN with additional resources and expertise to build our business and accelerate growth.”

J. Crandall, Benjy Diesbach, and Scott Baker represented Oak Hill Capital Partners on the Wave Board of Directors. Gregory VandenBosch represented GI Partners. Majority investor Oak Hill Capital Partners and GI Partners jointly stated, “We have enjoyed a tremendous partnership with Steve Weed, his management team, and the Wave employees over the past five years, and we are honored to have been a part of the company’s outstanding growth story. We wish continued success to Wave under the ownership of RCN/Grande and TPG.”

TPG’s investments in Wave and RCN reflect its strategy of partnering with innovative companies that are at the forefront of evolving industries. For more than a decade, the firm has been focused on the changing landscape of content creation, distribution, and consumption. Select investments include global accommodation sharing platform Airbnb; leading sports and entertainment intermediary CAA; live entertainment company Cirque du Soleil; online beauty products provider ipsy; online education platform Lynda.com (sold to LinkedIn); digital apartment rental platform RentPath; music streaming service Spotify; motion picture, television, and digital content studio STX; and ride sharing platform Uber.

TPG was advised on the transaction by Cleary Gottlieb, Credit Suisse, Deloitte, and PJT Partners. UBS Investment Bank acted as lead financial advisor to Oak Hill Capital Partners, Wave, and GI Partners (“Sellers”). The Sellers also received financial advice from Wells Fargo Securities LLC and legal advice from Paul, Weiss, Rifkind, Wharton & Garrison LLP. Oak Hill Capital Partners received additional financial advice from Waller Capital Partners LLC, and GI Partners received additional legal advice from Kirkland & Ellis LLP.

About TPG

TPG is a leading global alternative asset firm founded in 1992 with approximately $72 billion of assets under management and offices in Austin, Beijing, Boston, Dallas, Fort Worth, Hong Kong, Houston, London, Luxembourg, Melbourne, Moscow, Mumbai, New York, San Francisco, Seoul, and Singapore. TPG’s investment platforms are across a wide range of asset classes, including private equity, growth venture, real estate, credit, and public equity. TPG aims to build dynamic products and options for its investors while also instituting discipline and operational excellence across its investment strategies and the performance of its portfolio. For more information, visit www.tpg.com.

About RCN Corporation

RCN Telecom Services, LLC (www.rcn.com and www.rcn.com/business) provides industry-leading high-speed internet, all-digital TV and phone services for residential, small/medium and Enterprise business customers. PC Magazine’s Readers’ Choice Award named RCN one of the winners for best ISPs in 2013, 2015 and 2016 – RCN was rated highest in overall satisfaction. RCN is YouTube HD Verified, earning the company the highest-ranking that Google offers. RCN is also a Netflix Open Connect partner, placing in the Top rankings on the Netflix USA ISP Speed Index in the markets RCN serves. RCN’s affordably priced advanced digital services are delivered through its proprietary, state-of-the-art fiber-rich network and supported by 100% U.S.-based customer service. RCN’s primary service areas include Boston, Chicago, Lehigh Valley (PA), New York City, Philadelphia (Delaware County) and Washington, DC.

About Grande Communications, LLC

Grande Communications is a Texas-based broadband communications company that offers a full suite of Internet, TV and phone services for residential and business customers through its state-of-the-art, high-capacity, hybrid fiber-optic network. Since its launch 10 years ago, Grande has offered Texans a real choice in entertainment and communications services plus outstanding local customer and technical support. Grande proudly serves the following communities: Austin, San Antonio, Dallas, San Marcos, Waco, Corpus Christi, Midland and Odessa. For more information, visit mygrande.com, like Grande Communications on Facebook or follow @grandecom on Twitter.

About Wave Broadband

Wave is a leading provider of fiber and broadband services on the West Coast. Wave delivers a range of solutions for businesses, including custom fiber networks, high capacity Internet access, data transport, voice services, and colocation hosting. Wave also serves residential customers with internet, TV and phone services.

About Oak Hill Capital Partners

Oak Hill is a private equity firm managing funds with more than $10.0 billion of initial capital commitments since inception from leading entrepreneurs, endowments, foundations, corporations, pension funds, and global financial institutions. Over the past 30 years, the professionals at Oak Hill and its predecessors have invested in 84 significant private equity transactions across broad segments of the U.S. and global economies. Oak Hill applies an industry-focused, theme-based approach to investing in the following sectors: Consumer, Retail & Distribution; Industrials; Media & Communications; and Services. Oak Hill works actively in partnership with management to implement strategic and operational initiatives to create franchise value. For more information, please visit www.oakhillcapital.com.

About GI Partners

Founded in 2001, GI Partners is a leading private investment firm based in San Francisco. The firm has raised over $14 billion in capital commitments for private equity and real estate strategies from recognized institutional investors across the globe. GI Partners’ private equity team is active in a number of key sectors, including IT Infrastructure, Healthcare, Software, and Services. For more information on GI Partners and its entire portfolio, please visit www.gipartners.com.

Media Contact:

Luke Barrett
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Claire Papanastasiou
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Mark S. Peterson
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