(Peloton Photo)

Peloton announced Monday that it is acquiring Precor, the longtime Woodinville, Wash,-based makers of commercial fitness equipment, in a deal valued at $420 million.

Peloton has been riding a wave of popularity with its tech-fueled at-home interactive fitness program, and with the acquisition the 8-year-old company plans to establish U.S. manufacturing capacity, boost research and development capabilities, and accelerate Peloton’s penetration of the commercial market, according to a news release. Peloton has struggled to keep up with demand amid the pandemic and cited supply constraints in its November earnings call.

The deal would be Peloton’s largest to date. Shares of Peloton were up more than 8% in after-hours trading Monday.

Founded in 1980, Precor has decades of experience supplying fitness equipment to clubs, hotels, fitness centers and home exercisers. The company is a unit of Finnish sports equipment maker Amer Sports, which is owned by an investor consortium that includes Anta Sports and Tencent.

Precor operates 625,000 square feet of manufacturing facilities in Whitsett, N.C., and Woodinville.

“Precor embodies the Peloton mission of putting members first,” said Peloton President William Lynch in a statement. The deal, which would close in 2021, would add nearly 100 Precor research and development employees to Peloton’s team.

“By combining our talented and committed R&D and Supply Chain teams with the incredibly capable Precor team and their decades of experience, we believe we will be able to lead the global connected fitness market in both innovation and scale,” Lynch said.

Precor President Rob Barker will become CEO of Precor and general manager of Peloton Commercial, reporting to Lynch.

On its website, Precor says it launched the first ergonomically sound rowing machine in 1980, and has been “supporting the natural movement of the human body ever since.” In 1990, it created the first cushioned treadmill; the Elliptical Fitness Crosstrainer in 1995; and the Adaptive Motion Trainer in 2007.

The coronavirus pandemic has accelerated demand for Peloton equipment such as bikes and treadmills as more people look to avoid gyms and exercise from home. The company’s stock price is up more than 400% this year and its market capitalization is north of $40 billion.