Beats By Dr Dre Gets A $500 Million Pay Day

Private equity firm the Carlyle Group has invested a minority stake in the rap mogul’s audio company

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Beats Electronics, which makes colorful, pricey headphones branded by rapper and hip-hop mogul Dr Dre, has secured a minority investment from the Carlyle Group, a Washington, DC-based private equity firm. Carlyle is paying $500 million, reports the New York Times, valuing the music company at more than $1 billion.

The deal is the latest milestone and largest investment to date for Beats, whose signature Beats by Dr. Dre have seized a huge portion of the premium headphone market. HTC Mobile of Taiwan also agreed to sell its remaining 25% stake in Beats back to the company for $265 million.

Based in Santa Monica, California, Beats Electronics LLC was founded by music impresarios Andre Young, better known as Dr. Dre, and Jimmy Iovine, who serves as the company’s CEO. Beasts started selling headphones in 2008.

The company has grown rapidly in recent years as its signature headphones—which generally cost between $200 and $400 each—have captured more than half of the U.S. market, at 64%, for premium headphones, according to data from NPD Group.

Beats is on track to collect revenue of roughly $1.2 billion this year, up from less than $200 million in 2010. The company currently has about 360 employees, up from 30 less than two years ago.

Since inception, Beats has expanded its product base to include portable-speakers, audio systems for cars, laptops and mobile phones. Beats also has developed a streaming music service that could compete with the likes of Pandora Media Inc.

The company’ s mission is to provide a superior end-to-end music experience – with headphones, speakers, devices and services – “so fans can feel the emotion and hear the music the way artists intended it to sound from the studio.”

The Carlyle investment will further Beats’ push to become a global consumer-electronics company.

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