<p>Peloton Interactive Inc. is considering acquiring a business to help it catch up with all the exercise bikes and treadmills that customers ordered during the pandemic, and investors appeared to appreciate the deal on Monday afternoon.
Peloton PTON, + 3.25%, announced Monday afternoon that it had agreed to acquire another manufacturer of exercise equipment, Precor, for a valuation of 420 million dollars. The deal aims to help Peloton manufacture and deliver more of its exercise equipment, after the company was inundated with orders after the COVID-19 pandemic closed gyms and forced people around the world whole to take shelter with them.
Precor, a division of privately-owned Finland-based sporting goods company Amer Sports, has a manufacturing facility based in North Carolina, which will help Peloton expand its manufacturing capabilities in the United States. Peloton was manufactured in Asia, which also affected its ability to deliver equipment to American consumers.
Peloton revealed the pursuit of hot orders in November, but shares were crushed when executives revealed order books continued and will continue for the foreseeable future. The company’s gross margins were affected as Peloton spent to overcome logistical difficulties.