Beats by Dre seeks to buy back HTC's 25% stake in the company24
Beats would like to buy out the 25% stake in the company owned by Taiwan based handset manufacturer HTC. Originally, when HTC purchased the investment, it started including a special pair of Beats earbuds in the box with its new Android flavored smartphones, a practice that HTC eventually stopped due to the cost. But Beats has seen its revenue rise from $200 million in 2010 to $1 billion last year, partly on the success of its audio products for smartphones. Beats positions its line as having better sound that the earbuds offered by Apple.
HTC, which also includes audio enhancing software from Beats on most models, originally purchased 50.1% of the company in 2011 for $300 million only to cut that stake in half by selling it back to Beats a year later for $150 million. Considering the strong growth that Beats had achieved in that time span, HTC was giving the audio company a huge break on the price. Furthermore, HTC loaned Beats $225 million last year, backed by all of the company's assets. The loan is due sometime this year. If Beats is successful in buying back HTC's stake in the company, it is unknown if the latter would continue to include the Beats Audio software on future handset models.