Peloton shares soared on Tuesday after the company announced it would buy peer fitness-equipment company Precor in a deal valued at $420 million.
The acquisition should boost Peloton’s manufacturing capacity in the U.S. and market share for fitness products.
The maker of pricey spinning bikes and treadmills has seen sales soar as demand for streaming exercise services and workout equipment has risen during the pandemic, which forced gyms to shut and more people to work out at home.
But the company has struggled to keep up with demand – as some of its components are sourced overseas - leading to long wait times for consumers.
The deal, announced Monday, adds 625,000 square feet of manufacturing capacity for Peloton as it acquires Precor's factories in North Carolina and Washington.
Precor, a provider of treadmills, stationary bikes and workout accessories, is a unit of Finnish sports equipment maker Amer Sports- which is owned by a group of investors including Anta Sports and Tencent -- both Chinese companies.
Peloton's shares have gained more than 400% this year.