Beats Electronics to Receive Minority Investment from The Carlyle Group
Premium Audio Brand to Buy Back Remainder of Stake Previously Held by HTC
SANTA MONICA, Calif. & WASHINGTON -- September 27, 2013
Beats Electronics LLC (Beats), the audio brand co-founded by legendary artist
and producer Dr. Dre and Interscope Geffen A&M Chairman Jimmy Iovine,
announced today that The Carlyle Group (NASDAQ:CG), the global alternative
asset manager, has agreed to make a minority investment in Beats. 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 the fourth quarter 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.
Beats Co-Founder and Chief Executive Officer Jimmy Iovine said, “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.”
Carlyle Managing Director and Head of Consumer and Retail Sandra Horbach said,
“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 Iovine, Dr. Dre and their talented management
and product teams.”
In 2006, Iovine 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 currently maintains a greater than 64% percent
market share of the $100+ premium headphone category in North America
according to data provided by NPD Group 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
V, Carlyle’s $13.7 billion U.S. Buyout fund.
ABOUT BEATS ELECTRONICS LLC
Established in 2008 as the brainchild of legendary artist and producer Dr. Dre
and Chairman of Interscope Geffen A&M Records Jimmy Iovine, 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. Led by CEO Jimmy Iovine and President & COO Luke
Wood, Beats Electronics is based in Santa Monica, CA. For more information,
please visit http://beatsbydre.com/.
ABOUT THE CARLYLE GROUP
The Carlyle Group (NASDAQ:CG) is a global alternative asset manager with $180
billion of assets under management across 118 funds and 81 fund of funds
vehicles as of June 30, 2013. Carlyle's purpose is to invest wisely and create
value on behalf of its investors, many of whom are public pensions. Carlyle
invests across four segments – Corporate Private Equity, Real Assets, Global
Market Strategies and Global Solutions – in Africa, Asia, Australia, Europe,
the Middle East, North America and South America. Carlyle has expertise in
various industries, including: aerospace, defense & government services,
consumer & retail, energy, financial services, healthcare, industrial,
technology & business services, telecommunications & media and transportation.
The Carlyle Group employs more than 1,400 people in 34 offices across six
continents. For more information, please visit http://www.carlyle.com.
For Beats Electronics, LLC:
Sarah Joyce, 310-795-4757
Lizzie Garlinghouse, 415-606-1845
For The Carlyle Group:
Liz Gill, +1-202-729-5385
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