Peloton Acquires Precor for $420 Million

Published on December 23, 2020

Peloton (NASDAQ: PTON), the home fitness company that has dominated the industry amid the pandemic, acquired the fitness equipment company Precor for $420 million. The announcement sent stock prices in Peloton soaring, leaving investors happy after the company’s IPO earlier this year at around $28 per share.

A major reason that Peloton acquired Precor was for its 625,000 square foot manufacturing space. Peloton has seen major interest in its products in recent months as the COVID-19 pandemic halted gym memberships for millions of people. Left with nowhere to exercise, they turned to in-home gyms just as Peloton was earning a reputation for being the best in the industry.

The company, known for its interactive home workouts on a screen attached to a top of the line exercise bike (and now treadmill), has quickly become one of the most popular at-home fitness products in the United States. With dozens of instructors from around the world, Peloton’s cult-like following stretches far beyond the impact of its competitors.

The new manufacturing space will give Peloton the ability to keep up with its demand, as long wait times on new products have been one of its bigger issues in recent months. New purchasers of a Peloton cycling machine are experiencing wait times of up to 12 weeks in some cases, with very little re-sell of used products. The bike, which retails for around $2200 for a base model, is one of the most expensive on the market—and one of the most popular.

Peloton aims to reach 100 million subscribers one day—a goal that will only come into fruition if the company can keep up with demand. The acquisition of Precor will allow Peloton to leverage its success in new ways by upping production, while allowing it to tap into an already successful network of loyal Precor customers. To be specific, Precor’s existing customer bases in hotel chains and college campuses, as well as apartment buildings around the United States.

Precor, which offers a more affordable line of products than Peloton, will continue selling products under its current brand and pricing structure.

Julia Sachs is a former Managing Editor at Grit Daily. She covers technology, social media and disinformation. She is based in Utah and before the pandemic she liked to travel.

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