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Company to Invest $500 Million in Dr. Dre Beats Headphones

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Company to Invest $500 Million in Dr. Dre Beats Headphones

Beats Electronics will be receiving an infusion of capital in the form of $500 million from the U.S. private equity firm the Carlyle Group. Although based in the U.S., it is interesting to note that an Arabian company from Abu Dhabi, Mubadala Development Company, has a 7.5% ownership stake in the Carlyle Group.

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Reports indicate that the Carlyle Group values Beats Electronics at an estimated $1 billion, however, the exact numbers are not known. Owned by rapper Dr. Dre and music producer Jimmy Iovine, Beats Electronics manufactures and sells high quality earphones and speakers. With this new capital, Beats has said it will repurchase the 24.84% stake in the company that is owned by HTC. Given that HTC is battling with Samsung for supremacy in the Smartphone marketplace this was a no brainer for the company because their investment should yield them an estimated pretax profit of $85 million. Beats by Dre has stated that the partnership with the Carlyle Group was a logical choice because of their ability to help brands expand around the world.

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