The numbers man for an operation that’s recently stepped up its B2B power play in markets including Seattle and Silicon Valley, Wave Broadband CFO Wayne Schattenkerk has written the playbook for successfully integrating new acquisitions.
His secret? “First and foremost, when we acquire a company our main goal is not to screw up what they’ve been doing,” Schattenkerk deadpans. “We don’t really change anything on day one; we take the time to let them operate as they’ve been operating before we acquired them and understand how they’ve been successful to date.”
This approach guided Wave’s purchase of traditional cable operators —primarily acquisitions from Charter and other indies, he says— and continues to shepherd its push into the commercial market since 2012, when Schattenkerk led the purchase of dark fiber provider Black Rock. “We left that really separate for quite a while, because it was different than what we’d historically done,” he says.
Since that time Schattenkerk and his team have crystallized Wave’s B2B strategy, focusing primarily on dark fiber providers in the company’s footprint in California, Oregon and Washington.
Two recent deals illustrate the type of strategic growth he’s mining in both markets: The 2014 purchase of Layer 42, a colocation and network connectivity provider in the San Francisco area “has been successful for us primarily because it really bolstered our presence from a commercial perspective in the Bay area,” Schattenkerk says. “The co-lo is nice, but we were really after network connectivity and the ability to get into data centers in the Bay area.”
Schattenkerk also led the 2013 deal to acquire hybrid commercial/ residential company Spectrum in Seattle. At the time of purchase, 80 percent of Spectrum’s revenues came from the commercial side, primarily connectivity between data centers, with the balance yielding from residential 1 gig data offerings. “The commercial side of it has gone really well for us; we’ve grown that in Seattle and replicated it in San Francisco,” he says. “But the 1 gig offering—we’ve really taken that and tripled growth rates they were projecting. The 1 gig offering is sealing residential growth in those markets.”
“Over the past decade at Wave, Wayne has proven to be a customerfocused team leader who gets results,” says Wave CEO Steve Weed.
“Recently, Wayne has led the funding of Wave’s aggressive growth plans, chaired the NCTC as it took a strong stand on tough new programming deals and continued to be a leader at driving customer satisfaction at Wave.”
Part of that finesse is maintaining strong relationships with banks and bondholders. “We spend a lot of time keeping them abreast of what we’re thinking and where we’re headed,” Schattenkerk says. “And the underpinning to those strong relationships is good performance. The fact that we continue to outperform our peers makes my job easier. It sounds cliché, but you have to be able to execute every day.”
Schattenkerk has chaired the NCTC board for the past two years, helping to negotiate some recent programming deals with companies including AMC and NBCU. “The model of, ‘We’ve got this one great channel so let’s leverage it and force 25 others on you and jack up the rate’—that’s not what customers want,” he says. Though Schattenkerk acknowledges some work still to be done, “we’ve made really good progress in getting small and mid-sized operators the flexibility to address their customers’ needs.”
“Wayne is the ultimate cable financial executive,” says Rob Shema, EVP of the ACA. “He combines the financial knowledge and the operational experience to put Wave Broadband in the best financial situation possible so that they can expand by acquisitions and at the same time provide their customers with the best products and services available.”