Carlyle buys into Dr. Dre’s Beats

The firm will acquire a minority stake in the headphones and audio accessory company that artist and producer Dr. Dre co-founded in 2008.

The Carlyle Group will buy a minority stake in Beats Electronics, the audio products brand co-founded by artist and producer Dr. Dre. 

Financial terms of the transaction were not disclosed. 

Dr. Dre, co-founder of Beats headphones

Dr. Dre founded Beats with Jimmy Iovine, chairman of Universal Music Group’s Interscope Geffen A&M Record, in 2008. The company aims to improve poor sound quality caused by the digital revolution. Beats makes consumer headphones, earphones, speakers and patented Beats Audio software technology. 

“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 managing director Sandra Horbach said in a statement.

In a separate transaction, Beats will reacquire the minority stake previously held by Taiwanese smartphone and tablet manufacturer, HTC.

Carlyle will invest from its $13.7 billion Carlyle Fund V. The 2007 vintage fund was generating a 1.3x multiple and 10.3 percent internal return rate of as of 31 March, according to documents from the California Public Employees’ Retirement System