Dolby May Be Planning IPO

Ray Dolby, who developed music and motion-picture sound systems that won him Academy Awards, is planning an initial public stock offering that may value his company at as much as $1.5 billion, people familiar with the matter said.

Dolby Laboratories Inc., based in San Francisco, has hired brokerage firm Morgan Stanley and plans to raise about $400 million selling new shares and part of Ray Dolby’s stake, said a person who declined to be identified. The transaction is planned for next year.

Reached at his home, Dolby, 71, declined to comment.

His company developed a system in the 1960s that reduced background noise in tape recordings, enabling musicians to produce multitrack mixes without a hissing sound in the background. In the 1970s, the company’s surround-sound system was used by theaters for films such as “Star Wars.”

Dolby Labs has annual sales of more than $200 million.