- Leading interactive fitness platform Peloton (NASDAQ: PTON) announced that it has entered into an agreement to acquire Precor. These are the details.
Leading interactive fitness platform Peloton (NASDAQ: PTON) announced that it has entered into an agreement to acquire Precor — which is one of the largest global commercial fitness equipment providers with a significant U.S. manufacturing presence in a deal valued at $420 million.
Through this 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. And Peloton plans to produce connected fitness products in the U.S. before the end of the calendar year 2021.
Precor is going to operate as a business unit within Peloton. And Precor President Rob Barker will become CEO of Precor and General Manager of Peloton Commercial, reporting to Peloton’s President William Lynch.
Precor is a division of Finnish sporting goods company Amer Sports, which is owned by an investor consortium including ANTA Sports, FountainVest Partners, Anamered Investments, and Tencent Holdings Limited. The transaction is expected to close in early calendar year 2021.
The acquisition adds 625,000 square feet of U.S. manufacturing capacity with in-house tooling and fabrication, product development, and quality assurance capabilities in Whitsett, North Carolina, and Woodinville, Washington. And Peloton will be able to control the entire production process, from design to ship, and increase total production scale while maintaining a high level of product quality. By making fitness equipment closer to U.S. consumers, Peloton will be able to deliver connected fitness products to Members sooner.
The Precor U.S. facilities will join Peloton’s existing manufacturing network with its third party manufacturers and the Tonic facilities based in Taiwan. And once the deal closes, the Precor U.S. facilities will provide Peloton with incremental operational scale and flexibility to support the growth of its connected fitness product line.
The acquisition would add a team of nearly 100 dedicated research and development employees to Peloton’s accomplished R&D team. And with decades of experience designing and engineering cardio and strength fitness equipment and user experiences, the Precor team plans to work with the Peloton R&D team to design and create the next generation of connected fitness experiences.
Precor is known as one of the largest commercial fitness equipment providers in the world and it has 40 years of experience and expertise building a customer-focused business at scale. And under Peloton, Precor plans to make the Peloton experience accessible to more people through its long-standing relationships with hotels, multifamily residences, and college and corporate campuses.
Going forward, Precor will also continue to service its global network. And when the deal closes, the parties plan to make Peloton connected fitness products available to Precor’s broader network of commercial customers in Peloton’s existing markets.
“Precor embodies the Peloton mission of putting Members first. Over the last few months, we’ve gotten to know the 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. We’re looking forward to integrating the Precor team into Peloton and excited about what this means for the future of our brand and our ability to continue delivering world-class Member experiences.”
— Peloton’s President William Lynch
“Precor is driven to create personalized health and fitness experiences that help people live the lives they desire. That passion has led us to create highly customizable solutions running on the fitness industry’s largest commercial network. The Precor team is excited to combine our manufacturing expertise and more than 40 years of equipment innovations with Peloton’s award winning workout experiences to help commercial customers succeed and keep exercisers moving.”
— Precor’s President Rob Barker
Disclosure: I have a small PTON position in my stock portfolio