Beats Electronics Takes HTC Off Its Business for $265 Million
Beats Electronics has been looking for a way to end its partnership with HTC for a long time now and the relief for their long search for an investor is finally a done deal. Beats Electronics, the headphones giant manufacturer, has secured an investment partnership with Carlyle Group. Caryle Group is said to have valued Beats at $1 Billion according to a report from New York Times.
Caryle Group has purchased a whooping $500 million worth of shares, which includes two seats in the Beats Electronics board of only six Directors. Using the lumpsum, Beats has bought out HTC shares for $265 million ending their 2 year partnership with the smartphone giant that is now said to be on a downward spree due to wrangles facing the company.
In 2011, HTC bought a 51% stake at Beats Electronics marking the beginning of their partnership. In 2012, HTC sold half of their 51% stake back to Beats Electronics. In 2013, Beats Electronics is currently holding the largest share of headphones market in the US, thanks of course to their very colorful and expensive headphones, Beats by Dre. Beats Electronics was founded by musician icons, Dr. Dre and Jimmy Iovine. The growth of Beats Electronics continues to increase, and the fact that Caryle Group, a private equity company has invested in Beats is such an endorsement. Beats Electronics is definitely bursting with confidence even after they purchased the online music streaming service known as Mog last year.
“These transactions represent the evolution of the financial strength and significant growth prospects of Beats,” Mr. Iovine, Beats Electronics CEO, said in a statement. As Beats begins its friendship with Caryle Group, which we hope will last long, we are yet to know whether HTC phones will still be sold with Beats still featured on its devices. Mr. Lovine added, “Carlyle is a fantastic investment partner and we look forward to building the next chapter of Beats.”
In regards to whether Beats will be featured in mobile devices, which has definitely contributed a lot to smartphones like HTC’s … “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,” Sandra Horbach, Carlyle’s head of consumer and retail, said in a statement.
Images courtesy of Beatsbydre.com