According to a person who was familiar with the matter, Beats Electronics received a minority investment from private equity firm the Carlyle Group. The investment was worth USD500 million. The investment would also have Beats offering two seats in the audio company's board to Carlyle. Investment equity would be coming from the affiliates of the USD13.7 billion Carlyle Partners V.
Beats, whose company valued at over USD1 billion after Carlyle's investment, had gained the top spot of the market in premium headphones. Founded by music artist Dr. Dre and music producer Jimmy Iovine, its over USD100 headphones had grabbed 64% of the headphone market share, according to research firm the NPD Group.
Beats had been inching itself away from the support of shareholder HTC. Beats recently paid USD265 million and repaid a USD150 million note to buy back the 25% stake HTC held. The audio company has also transitioned to making speakers and sound systems for HTC and Hewlett-Packard products such as phones and computers. It also bought digital music streaming service Mog for over USD14 million.
Iovine, who is chief executive of Beats, said about the transactions, "These transactions represent the evolution of the financial strength and significant growth prospects of Beats."
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