Report: Apple 'Closing In' On Dr. Dre's Beats For $3.2 Billion

May 8 2014, 6:01pm CDT | by

Could “Beats By Dre” soon be “Beats By Apple”?

That’s what  Matthew Garrahan and Tim Bradshaw of the Financial Times are reporting: Apple is “closing in” on what would be its largest ever acquisition, a potential $3.2 billion purchase of Beats Electronics.

Beats is primarily known as the popular high-end headphone maker founded in 2008 by rapper-turned-businessman Dr. Dre (perennial member of Forbes’ Cash Kings list) and music producer Jimmy Iovine. The company also operates a new streaming music service.

Forbes had previously estimated that the founders each owned approximately 25% of the company, but there have been a number of transactions in the last year, with former majority owner HTC backing out and private equity firm Carlyle Group investing as a minority partner. Beats also reportedly raised $60 million in funding from, among others, billionaires Len Blavatnik, Marc Rowan, James Packer, and Lee Bass.

Most recently, Forbes estimated the value of Beats at about $2 billion, but Apple would appear to be paying well above that if the acquisition goes through.

Unlike some of its Silicon Valley peers, Apple is not known for making big acquisitions, so such a deal would be a marked departure in style for CEO Tim Cook. But it could be a way to start using Apple’s massive hoard of cash or attempt to shore up the company’s large but slowing iTunes music sales business. $3.2 billion would be the same price Google paid for high-end thermostat maker Nest Labs in January.

The Financial Times reports that a deal could be announced as early as next week, although terms are not final.

Apple shares are down slightly in after hours trading. Recently, the stock has been trading at its highest price since October 2012.

Follow Brian on Facebook and Twitter.
/>

Apple's Most Notable Acquisitions

 
 
 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Microsoft and Yahoo announce new Search Deal with Big Changes
Microsoft and Yahoo announce new Search Deal with Big Changes
Bing is now the #2 search engine with 20% marketshare behind Google. On the heel of this news, Microsoft and Yahoo announce a new search deal.
 
 
Bloomberg Terminals go down affecting Traders Worldwide
Bloomberg Terminals go down affecting Traders Worldwide
Bloomberg terminals went down in London and affected the traders dealing on the terminal worldwide.
 
 
Google celebrates 155th Anniversary of the Pony Express with Doodle Game
Google celebrates 155th Anniversary of the Pony Express with Doodle Game
Google is stealing your time today with a fun Google Doodle Game. You must delivery 100 letters as a Pony Express rider.
 
 
Amazon X-Ray for Movies and TV Shows comes to Fire TV
Amazon X-Ray for Movies and TV Shows comes to Fire TV
“Who’s that guy?”, “What’s she been in?”, or “What is that song?” Never have that problem again with X-Ray on Amazon Fire TV.