Cable internet provider WaveDivision Holdings is reportedly looking for a sale that could value the company at US$1bn.
Citing a person familiar with the process, Bloomberg reported that WaveDivision is exploring a sale and that Royal Bank of Canada and…
Cable internet provider WaveDivision Holdings is reportedly looking for a sale that could value the company at US$1bn.
Citing a person familiar with the process, Bloomberg reported that WaveDivision is exploring a sale and that Royal Bank of Canada and Waller Capital Corp are advising.
Private equity firms are the most likely bidders for WaveDivision, the source reportedly said.
WaveDivision, which is based in Washington state in the north-western US, was not immediately available for comment outside normal business hours.
According to the website of its subsidiary Wave Broadband, WaveDivision serves more than 325,000 customers in California, Oregon and Washington.
Craig Moffett, an SVP and senior analyst at Sanford C. Bernstein, said that smaller cable operators like WaveDigital Holdings are “struggling to hold their own” in the face of higher programming costs, particularly retransmission consent rights for TV.
“Without scale, they simply don’t have the negotiating leverage to hold back the tide,” Moffett said.
He added that private equity firms, which had traditionally been buyers for this type of asset, are having “a harder time making the numbers work”, as they need to confront the same issues with programming as those selling the assets.
“More and more, the large strategic buyers – TimeWarner Cable and Comcast – are the only realistic option. But it’s not clear that either one is particularly interested in these kinds of tuck-in acquisitions, at least at anything other than fire sale prices.”
