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The big winner if Apple buys Beats

By
Dan Primack
Dan Primack
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By
Dan Primack
Dan Primack
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May 9, 2014, 9:18 AM ET
WASHINGTON, D.C.., MAY 27, 2011: David Rubenstein, William Conway and Daniel D'Aniello founded The Carlyle Group, which prepares to launch its IPO. (Photo by ASTRID RIECKEN For The Washington Post)
WASHINGTON, D.C.., MAY 27, 2011: David Rubenstein, William Conway and Daniel D'Aniello founded The Carlyle Group, which prepares to launch its IPO. (Photo by ASTRID RIECKEN For The Washington Post)
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FORTUNE — There’s a growing sentiment in venture capital circles that big private equity firms will eventually come to regret their recent investments in late-stage startups. Pure equity investments in young companies isn’t what leveraged buyout firms do best, and we’ve seen this movie before.

But that regret will have to wait, following a Financial Times report that Apple (AAPL) has agreed to buy Beats Electronics for $3.2 billion.

Beats was founded by rapper Dr. Dre and music producer Jimmy Iovine, and has two main business lines: One is top-end headphones, while the other is a music streaming service (Beats Music). Last September the company raised around $500 million from private equity firm The Carlyle Group (CG), at a valuation that The Wall Street Journal placed at “more than $1 billion.”

Or, put another way, Carlyle may be about to triple its money in just eight months. Or, put even another way, Carlyle may book around $1 billion in profit before even celebrating its investment’s one-year anniversary. Can’t calculate the internal rate of return without specific data points, but safe to say it’s massive.

Shortly after the investment was made, Bloomberg’s Kyle Stock asked if Dr Dre underpriced his Beats. If the FT report is right, then it’s looking like he did.

Sign up for Dan Primack’s daily email newsletter on deals and deal-makers: GetTermSheet.com

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