The Carlyle Group has agreed to make a minority investment in Beats Electronics, the audio brand co-founded by artist and producer Dr. Dre. Beats will use a portion of the Carlyle investment to reacquire the minority stake in Beats held by HTC Corp. As a result, HTC will no longer have any ownership stake in Beats.
Beats Electronics is the parent company of the Beats by Dr. Dre line of high-quality headphones and speakers, as well as Beats Audio HD-sound systems. The company’s mission is to build quality music experiences for all elements of the digital music ecosystem–including headphones, devices and services–so that fans can hear music the way artists intended it to sound in the studio. This includes partnerships with computer manufacturer HP and automotive manufacturer Chrysler Group. The company was founded in 2008 and is based in Santa Monica, CA (www.beatsbydre.com).
“These transactions represent the evolution of the financial strength and significant growth prospects of Beats. Carlyle is a fantastic investment partner and we look forward to building the next chapter of Beats,” said Beats Co-Founder and Chief Executive Officer Jimmy Lovine.
Carlyle will work with the Beats management team to continue expanding the brand and building the business both domestically and internationally.
“We are confident 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. Carlyle has a strong history of helping great brands expand globally, and we are thrilled to partner with Jimmy Lovine, Dr. Dre and their talented management and product teams,” said Carlyle Managing Director and Head of Consumer and Retail Sandra Horbach.
Equity for Carlyle’s investment in Beats will come from affiliates of Carlyle Partners V, Carlyle’s $13.7 billion U.S. Buyout fund.
The Carlyle Group invests in buyouts, growth capital, real estate and leveraged finance in Africa, Asia, Australia, Europe, North America and South America focusing on aerospace & defense, automotive & transportation, consumer & retail, energy & power, financial services, healthcare, industrial, infrastructure, technology & business services and telecommunications & media. The Carlyle Group employs 1,400 people in 34 offices across six continents and is based in Washington, DC (www.carlyle.com).
© 2013 PEPD • Private Equity’s Leading News Magazine • 9-27-13