Peloton has revealed its plans to purchase Precor, a leading global provider of fitness equipment for commercial use. Those familiar with hotel gyms or dedicated fitness centers will likely recognize the Precor name, and this acquisition represents a strategically sound move for Peloton given the current landscape and the company’s growing popularity.

The agreement to acquire Precor is valued at $420 million. Beyond strengthening Peloton’s presence in the commercial fitness sector, this deal significantly boosts its manufacturing capacity. This is particularly important as Peloton experiences a substantial backlog of orders for its Bike and Tread products, a consequence of increased demand spurred by the COVID-19 pandemic. Precor currently operates a substantial manufacturing base within the United States, alongside dedicated teams and facilities focused on research and development. Peloton reports that this acquisition will add 625,000 square feet of U.S.-based manufacturing space, spread across Precor locations in Whitsett, North Carolina, and Woodinville, Washington.

Initially, the acquisition – expected to be finalized in 2021 pending necessary approvals – will be utilized to expedite the fulfillment of orders for existing Peloton equipment. Looking ahead, this deal positions Peloton favorably for future expansion within the commercial fitness market as it recovers and grows. While the pandemic has greatly benefited Peloton’s home fitness offerings and subscription services, it has simultaneously presented significant challenges for traditional gyms and hotels, likely impacting Precor’s business over recent months.

This marks Peloton’s largest acquisition to date, and it may have been secured at a favorable price. Reports from last November indicated that Precor’s parent company, Anta Sports, was seeking a sale price of approximately $500 million. As part of this agreement, Rob Barker, the current President of Precor, will assume the role of General Manager of Peloton Commercial, which is expected to facilitate the wider adoption of Peloton’s connected fitness equipment in gyms worldwide as people become more confident in returning to these facilities.