At-home fitness giant Peloton has announced it plans to purchase workout equipment provider Precor for $420 million, prompting its stock price to surge 15 percent as of Tuesday.
This news caps off what has been a wildly successful year for Peloton. Last month the company entered into a multi-year partnership with Grammy Award-winning musician Beyoncé Knowles, and earlier this fall it teased the release of a new stationary bike and treadmill. All the while, demand for Peloton’s equipment and virtual fitness classes has been surging amid the pandemic. The company is also hiring for hundreds of roles at its NYC headquarters and offices around the world.
However, this latest boom has also strained Peloton’s supply chain, causing months-long order delays for some customers. This is something the pending Precor acquisition is anticipated to change.
Based just outside Seattle, Precor is one of the largest commercial fitness equipment providers in the world. The 40-year-old company maintains a significant manufacturing presence here in the United States, with facilities in Whitsett, North Carolina, and Woodinville, Washington.
This deal will add another 625,000 square feet of manufacturing capacity for Peloton, which says it will be able to control the entire production process from design to shipment, hopefully improving its ability to get equipment out to customers faster. Precor’s 100-person research and development team will also be joining Peloton’s.
“Over the last few months, we’ve gotten to know the [Precor] team and saw firsthand how much they care about their products, customers and, last but not least, their employees. By combining our talented and committed R&D and supply chain teams with the incredibly capable Precor team and their decades of experience, we believe we will be able to lead the global connected fitness market in both innovation and scale,” Peloton President William Lynch said in a statement.
The acquisition, which is expected to close in early 2021, will be Peloton’s largest to date. Should the deal go through, Precor President Rob Barker will become CEO of Precor and general manager of Peloton Commercial.
