There had been some talk back in August about how Beats Electronics was looking to get the remaining 25 percent stake still held by HTC. That discussion popped up in mid-August and while the details seemed solid at the time, the talk went quiet. But while the talk may have gone quiet, it looks like the two companies were in discussion and as of today HTC has announced they have sold their remaining stake in Beats Electronics.
This comes roughly a year after HTC sold their majority stake in Beats Electronics and this latest round saw the transfer of 24.84 percent. The price for today was $265 million. Looking back, the initial investment by HTC was $300 million and when they sold their majority stake last year that was for $150 million. Simply put, those doing the math will see that HTC was able to get a better price this time around.
While speculation is likely to build as to why the two companies split, it is looking like neither company was all that happy with the arrangement. Details coming from the Wall Street Journal point towards Beats complaining about disagreements over strategy and investment direction. The split may actually be beneficial for Beats as they likely have more control over their next moves, which includes growing in the portable speaker market.
While we have yet to hear much on the streaming music service lately, Beats had been expected to launch a service to rival Spotify and Pandora. Otherwise, further details coming from this report point towards Beats taking a new investor. That investor is said to be the Carlyle Group LP and it looks like they will be investing $500 million for a minority stake in the company.
Otherwise, while the equity in Beats Electronics may not have helped HTC sell lots and lots of smartphones, there is a plus. It seems they have managed to actually make some money off of this Beats deal. Not only do they have the cash from this latest 24.84 percent sale, but it looks like they have come out ahead for the whole deal. HTC ended up coming out with a total of $415 million on their initial $300 million investment.
VIA: HTC Investors