Interactive fitness platform Peloton has inked a deal to acquire Precor, a global fitness equipment provider with a manufacturing presence in the U.S., according to a press release.
The deal is worth $420 million and is expected to close in the early part of 2021. With the acquisition, Precor will operate as a business unit within Peloton's umbrella, with President Rob Barker taking on the title of Precor CEO and general manager of Peloton Commercial, reporting to Peloton President William Lynch, the release stated.
The acquisition positions Peloton to join the U.S. manufacturing capacity, help out with the company's research and development capacities with Precor's team, and boost Peloton's entry into the commercial market. The release stated the acquisition of Precor gives Peloton another 625,000 square feet of new space to manufacture in Whitsett, North Carolina, and Woodinville, Washington, complete with room for in-house tooling and fabrication, product development and quality assurance.
In addition, the acquisition will add 100 new research and development employees to help design better products for cardio and strength fitness and more, the release stated. And with Precor's size as a fitness equipment provider, it can use relationships with venues like hotels, multifamily residences and college and corporate campuses to help Peloton's equipment find more reach.
Peloton's current plan, according to the release, is to produce connected fitness items in the U.S. before the end of the next year.
Precor has previously been a division of Finnish sporting goods company Amer Sports, the release stated.
As going to the gym has become a potential health hazard with the pandemic, Peloton and similar companies have seen an increased demand for at-home stationary bikes and treadmills. There's also a new surge of demand for connected "smart" devices that can let users take part in virtual classes and monitor progress while working out.
