Peloton Interactive will acquire fitness-equipment company Precor Inc. in a move that will accelerate its manufacturing after being inundated with orders and shipping delays during the pandemic.
The New York City-based home-fitness company, known for its spin bikes and treadmills with screens that let users stream workouts live and on-demand, will acquire Precor Inc. for $420 million, Peloton announced Tuesday.
“With the acquisition, Peloton plans to establish U.S. manufacturing capacity, boost research and development capabilities with Precor's highly-skilled team, and accelerate Peloton's penetration of the commercial market,” Peloton said in a news release.
The company plans to produce connected fitness products by the end of 2021, though it wouldn’t reveal any additional products outside of its bikes and treadmills.
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Peloton, in September, trimmed down the cost of its bike to $1,895, a whole $350 cheaper than previously, with the monthly financing rate down $9 to $49 per month. At the time, Peloton also introduced a more accessibly priced treadmill at $2,495, down from $4,295.
The company also announced earlier this month it would add 1,600 more jobs to its campus in Plano, Texas.
The fitness company, which has partnered with stars like Beyonce and Shonda Rhimes in 2020 to help it produce content for its streaming workouts, warned in November it was having trouble with its supply chain, Wall Street Journal reported. Critics have complained about product delays on social media, with some canceling their orders after getting fed up with waiting during the pandemic.
Precor is a division of Finnish sporting goods company Amer Sports, which is owned by an investor consortium including ANTA Sports (HKG:2020.HK), FountainVest Partners, Anamered Investments Inc. and Tencent Holdings Limited.
The transaction is expected to close in early 2021.