Private Equity to make minority investment in Dr. Dre’s Beats Electronics

Private Equity to make minority investment in Dr. Dre’s Beats Electronics and help expand the brand globally; photo: Djamila Celina Melcherts for Beats

The Carlyle Group announced a minority investment in Beats Electronics, the audio brand co-founded by Dr. Dre and Jimmy Iovine. Terms of the investment were not disclosed. Carlyle will work with the Beats management team to continue expanding the brand and building the business both domestically and internationally. Additional terms of the transaction, which is expected to close in Q4 of 2013, were not disclosed.

Beats also announced today that it has entered into a definitive agreement to reacquire the minority stake in Beats held by HTC Corp. As a result, HTC will no longer have any ownership stake in Beats.

Private Equity firm Carlyle expects that Beats will continue to drive innovation and growth in the premium audio accessory market, particularly as the proliferation of smart phones and tablets stimulate increased consumption of digital media.
Private Equity players have a strong history of helping great brands expand globally

In 2006, Lovine and Dre set out to solve the problem of poor sound quality caused by the digital revolution combined with the proliferation of cheap earbuds bundled with MP3 players, laptops, mobile phones and other portable devices. Their solution was Beats Electronics. Formally established in 2008, Beats comprises the Beats by Dr. Dre family of premium consumer headphones, earphones, and speakers as well as patented Beats Audio software technology. Through these offerings, Beats has effectively brought the energy, emotion and excitement of playback in the recording studio to the listening experience. This has introduced an entirely new generation to the possibilities of premium sound entertainment.

Beats is estimated to have a 64%+ percent market share of the $100+ premium headphone category in the US and also reaches consumers through product partnerships that include Chrysler Group automobiles, Hewlett Packard computers and monitors, and HTC smartphones.

Equity for Carlyle’s investment will come from affiliates of Carlyle Partners and Monarch Capital Partners $13.7 billion U.S. Buyout fund.

 

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