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Summary
- Peloton Interactive Inc has announced that it will be purchasing fellow exercise equipment company Precor Incorporated, a deal that is likely to be completed early next year.
- Peloton stocks jumped by over three per cent on Monday, December 21, as the news broke.
- The acquisition of Precor Incorporated is being dubbed as the biggest deal ever for Peloton.
- Peloton saw record sales amid the coronavirus pandemic this year, boosting its total revenue by 232 per cent YoY to US$ 757.9 million in the first quarter of fiscal 2021.
New York-based Peloton Interactive Inc (NASDAQ: PTON, PTON:US) is all set to buy fellow exercise equipment company Precor Incorporated in a deal reportedly valued at US$ 420 million. As the news broke, Peloton stocks jumped by over three per cent on Monday, December 21.
Peloton said in its official statement that with this acquisition, the company aims at boosting its manufacturing ability and market share in the United States. The purchase will be adding about 625,000 square feet to Peloton’s manufacturing capacity in the US, which would help strengthen its delivery capabilities. Peloton said that the deal would also to its consumer base.
The acquisition of Precor Incorporated, dubbed as the biggest deal ever for Peloton, is likely to be completed early next year.
Peloton’s Business & Stock Growth Amid COVID-19 Pandemic
As a result of gyms and outside sport centres shutting down amid the COVID-19 pandemic, demand for home exercise equipment surged massively this year. Peloton, as a noted manufacturer of gym accessories, made the best of this increasing demand with record sales. While the company recorded a 172 per cent year-over-year (YoY) surge in its revenue in the fourth quarter of fiscal 2020, its total revenue ballooned 232 per cent YoY to US$ 757.9 million in the latest Q1 2021.
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Peloton’s Connected Fitness Subscriptions swelled by 137 per cent YoY to over 1.33 million, while its paid Digital Subscriptions skyrocketed 382 per cent to about 510,000 in the first quarter of fiscal 2021.
Stocks of Peloton Interactive leapt by over 400 per cent this year and by almost 24 per cent in December to date. The stocks are currently priced at US$ 144.39.
What Is Precor Incorporated?
Precor Incorporated, which manufactures treadmills, stationary bikes and other gym gears, is part of Chinese-owned Finnish company Amer Sports. Precor, as stated in the latest Peloton statement, has a customer base that includes hotels, colleges, corporate campuses, etc.
