Peloton buys Precor
Leisure Opportunities
Job search
Job Search
see all jobs
Latest job opportunities
star job
Coach Gyms
£15k basic + commission + Bonus
Leeds, UK
LeisureForce
IRO £3,500+ per month
East Coast of Saudi Arabia
Actif Sport and Leisure
£19,312* Fixed Point *Pro-rata
Amman Valley Leisure Centre
star job
Lancaster University
Competitive
Lancaster, UK
star job
University College School
£21,000
Hampstead, London, UK

Peloton buys Precor

Job opportunities
LeisureForce
IRO £3,500+ per month
location: East Coast of Saudi Arabia
The Lansdowne Club
Uncapped Earning Potential
location: Mayfair, London, UK
training opportunity
Les Mills
location: Nationwide, United Kingdom
more jobs

In a surprise move, Peloton – which finished its last financial quarter with US$2bn cash in the bank – has announced it's purchasing commercial fitness giant, Precor. The deal, worth US$420m, is expected to complete in 2021.

Precor will become a division of Peloton, with current Precor president, Rob Barker, becoming CEO of Precor and general manager of Peloton Commercial. He will report directly to William Lynch, president of Peloton.

The market liked the deal, with Peloton's share prices jumping 8 per cent at the news. Peloton's shares have climbed 403 per cent this year, due to record sales during the pandemic, taking it to a market capitalisation around US$42bn.

This increased demand for Peloton products, however, has led to challenges with supply and so the purpose of the Precor deal is in part to buy Peloton more manufacturing capacity.

“No one would wish a global pandemic on anybody, but it’s been a tailwind for our business,” Lynch has said. “Keeping up with that growth has been a big company priority.

“As we’ve been investing in scaling our manufacturing, this is an area where Precor is very strong,” he added.

Peloton will gain 625,000sq ft of factory space in North Carolina and Washington State, US, along with a 100-strong R&D team, in-house tooling and fabrication and a quality assurance set-up, enabling it to shorten time to market for its products, as it's existing manufacturing capacity is mainly in Asia.

Peloton, which hired former Hilton Hotels fitness and spa director, Ryan Crabbe in 2018, already has experience of supplying bikes to the hotel market. Now it's likely to drive this to another level by tapping into Precor's strength in the hospitality sector.

Peloton has also said it plans to make a range of connected fitness for the commercial market before the end of 2021.

It's also likely Peloton will aim to leverage Precor's relationships with its corporate and college customers. Precor has deals with organisations such as EXOS for tech integration, making these sectors a valuable source of sales.

With vaccines now being delivered, as we come out of the pandemic, the company will not be able to ride the boom in the home fitness market forever and may be seeking to broaden its trading base – potentially a sign of confidence in the health and fitness facility market.

However, speaking to Fit Tech magazine earlier this year, Peloton founder, John Foley said "Peloton will always be a B2C company," so perhaps the deal will see Precor pivoted partly to supply the consumer market. Time will tell.

Fundamentally, having manufacturing capacity on either side of the globe, R&D capabilities and access to both the B2B and B2C fitness markets – as well as things such as Precor’s tie up with Sony – puts the business in a position to move in almost any direction it chooses over the next five years.

This isn't Pelton's first acquisition – it bought Tonic Fitness Technology in Taiwan – one of the companies that make its bikes, in 2019. The US$47.4m deal enabled Peloton to better control its manufacturing output. It also bought digital music aggregator Neurotic Media in 2018.

Precor's owner, Finnish sporting goods company Amer Sports, is in turn owned by a group of investors including Chinese sportswear giant Anta Sports, FountainVest Partners, Anamered Investments Inc and Tencent Holdings. There have been rumours of a potential sale for over a year.

FOOTNOTES

The deal comes as Mad Dogg Athletics, inventor of the Spinner bike, has issued court action against Peloton for patent infringements, as reported in HCM's sister magazine, Fit Tech.

Madd Dogg and Precor have an agreement in place going back to 2015 for Precor to produce Spinning branded bikes.

HCM is seeking clarification as to whether Peloton can now use the Madd Dogg brand and whether the court action will be dropped or will proceed.

For a recent interview with Peloton founder, John Foley, in Fit Tech magazine, click here.

Sign up for FREE ezines & magazines
In a surprise move, Peloton – which finished its last financial quarter with US$2bn cash in the bank – has announced it's purchasing commercial fitness giant, Precor.
HAF,SUP,TEC
2020/THUMB346863_369111_335634.jpg

More News

1 - 15 of 43,228
16 Apr 2021
Health clubs and gyms will be able to open their doors to individual training sessions on 30 April. As with other home nations, however, indoor ... More
15 Apr 2021
As health clubs and gyms reopen following lockdowns, it is "absolutely crucial" operators take a tough stance when it comes to enforcing social distancing and ... More
15 Apr 2021
IHRSA and Fitness Brasil say they have signed a partnership agreement that will see the two organisations working together on industry events for 'at least ... More
14 Apr 2021
EuropeActive has joined the All Policies for a Healthy Europe (APHE) initiative, as part of its strategy to increasingly engage with EU health policymaking. Launched ... More
14 Apr 2021
Lack of exercise is a major cause of death from COVID-19, according to new research, with only advanced age and organ transplant leading to greater ... More
13 Apr 2021
World Leisure Organization (WLO) has opened the entry process for its International Innovation Prize. Now in its ninth year, the award celebrates organisations that have ... More
Miha Bodytec GmbH
Miha Bodytec GmbH
13 Apr 2021
Alton Towers theme park in the UK will offer visitors the opportunity to indulge in some 80s nostalgia when it launches three "retro" rides this ... More
12 Apr 2021
Health clubs, leisure centres and studios in England have opened today (12 April) for the first time during 2021. Some opened their doors to exercisers ... More
11 Apr 2021
A major new initiative will look to strengthen and unite the fitness industry's voice in influencing policy and policymakers in the US. The National Health ... More
09 Apr 2021
A parliamentary report is calling for a £3bn intervention fund to build back better health as we come out of the COVID-19 pandemic. The report, ... More
09 Apr 2021
The coronavirus pandemic has resulted in visits to the world's top 100 museums and galleries falling by three quarters. According to an annual survey, conducted ... More
09 Apr 2021
Leisure centre operator Everyone Active has formed a partnership with WW (formerly called Weight Watchers), which will see the two combining their exercise and dietary ... More
FreeMotion Fitness
FreeMotion Fitness
09 Apr 2021
Adults suffering from chronic pain should be advised to take exercise, rather than be prescribed painkillers, according to new guidance from the National Institute for ... More
08 Apr 2021
As health clubs and fitness studios in England are counting the hours down to reopening day on Monday 12 April, PureGym has announced it will ... More
07 Apr 2021
Empowered Brands, the franchise investment business that acquired énergie Fitness out of a CVA in June 2020, has announced plans to accelerate the roll-out of ... More
1 - 15 of 43,228
Active IQ
Active IQ