Peloton rises 14% to record high on $ 420 million Precor acquisition

  • Shares of Peloton landed as high as 14% at record highs on Tuesday, raising the market capitalization of the connected-fitness company by $ 6 billion.
  • The manufacturer of internet-connected exercise machines has agreed to acquire Precor, a major commercial supplier of fitness equipment, for $ 420 million in cash.
  • Peloton intends to use Precore’s US manufacturing facilities to increase production and improve its delivery time.
  • The company also hopes to boost its innovation and generate greater sales of equipment and membership to gyms, hotels, colleges and other commercial customers.
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Peloton’s stock rose as much as 14% on Tuesday after a deal involving the fitness company to buy Precor for $ 420 million in cash. The rally added up to $ 6 billion in peloton’s market capitalization.

Precor makes cardio and weight machines, and is one of the largest commercial suppliers of fitness equipment in the world. Peloton plans to use the 40-year-old company’s 625,000-square-foot US manufacturing capacity to build more equipment and ship home appliances as soon as possible.

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Takeover will also add about 100 people to Peloton’s research and development team. In addition, the peloton hopes it will boost sales of its bikes and treadmills – which are equipped with Internet-connected screens to allow users to buy live and on-demand classes – gyms, hotels, colleges, apartment blocks and exercise equipment Companies can get permission. For shared use.

Pelotic stocks have skyrocketed 450% this year as the epidemic has prompted more people to invest in home gyms and online fitness classes. The company’s revenue grew 232% year-over-year to $ 758 million, leaving the company with a $ 50 million loss in net income to $ 69 million.

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However, the manufacture and distribution of peloton has been severely restricted this year, resulting in long waits for customers. Its Precor purchase will help to overcome those issues.

This year there is a chart showing the significant stock-price gains of the peloton:

Peloton stock chart

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