Peloton (NASDAQ:PTON) is seeing a major spike in PTON stock after announcing a deal to acquire fitness equipment company Precor.
Here’s what PTON stock investors need to know about the acquisition plan.
- Peloton is planning to pay a total of $420 million to bring Precor under its control.
- This will have it operating as a business unit within the company.
- When the transaction closes, Precor President Rob Barker betake on new roles at Peloton.
- That includes serving as the CEO of Precor, and the general manager of Peloton Commerical.
- This will have him reporting directly to Peloton president William Lynch.
- PTON is expecting its acquisition of Precor to close in early 2021.
- The company also notes that it plans to speed up its push into the commercial market with this acquisition.
- That includes producing connected fitness products in the U.S. by the end of next year.
- This will be possible with the help of the Precor team.
- Peloton’s acquisition of Precor adds 625,000 square feet of manufacturing in the U.S.
- Among this is equipment for in-house tooling, development, and production.
- That includes factories in Whitsett, N.C. and Woodinville, Wash.
- The Precor manufacturing network will work alongside Peloton’s current third-party network, which is based out of Taiwan.
- Peloton says that this should allow the company to get products out to customers faster.
- It will also result in a boost to its research and development with the company gaining almost 100 researchers.
PTON stock was up 13.2% as of Tuesday morning.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.