In a move anticipated for months, Precor parent Amer Sports of Finland announced on Jan. 12 its acquisition of FPI, best known for its Icarian strength brand.
The addition of the respected high-end commercial strength brand to the Precor family could allow the company to gain market share exponentially -- especially in Europe -- since it will now have a full line of cardiovascular and strength products to offer commercial customers.
"This was an obvious hole -- commercial strength; we didn't have commercial strength," Precor President Paul Byrne told SNEWSÂ®. "The package business is more prevalent in Europe right now, and without the whole line, it was very difficult to compete; the package deal is happening more and more in the U.S. too."
Talks began last spring and were finalized Friday, Jan. 9, when Byrne and his team flew to FPI headquarters in Sun Valley, Calif., just north of Los Angeles. There, the 110 FPI employees gathered in a meeting room at a local Hilton hotel to hear about the deal. None of the employees will lose jobs, and FPI's President and CEO Rick Wallace will continue as Precor's strength group general manager. Price of the transaction was USD $11.8 million. Further details and terms were not disclosed.
"We really believe the combined entity will be very, very competitive in the market and is positioned for growth," Icarian Executive Vice President Russ Squier told SNEWS. "We're excited about the potential."
Byrne said FPI and Precor are integrating FPI operations into Precor business systems and processes; already, the sales teams have become one.
"It'll be two separate organizations folded nicely into one another," Byrne said.
Wallace said the acquisition provides FPI with greater stability, opportunity and growth.
"Like Precor, we face a challenge in industry consolidation and increased demand for package deals," said Wallace. "Right away, we'll begin addressing those challenges. Beyond that, we'll benefit from representation by Precor's large distribution network."
Precor began contemplating an acquisition of a commercial strength brand from the time it was acquired by Amer from ITW a little more than a year ago. Amer wanted to grow Precor, and Byrne told Precor's new parent he needed a strength company to do that. But finalizing a deal for such an acquisition goes well beyond money exchanging hands if the end result will succeed.
"What we realized is that a successful merger acquisition is not about finances, but about people and culture," Squier said. "We think we have an exceptionally good fit."
In addition to the Icarian brand, other FPI product lines are marketed under the names Abench, Flite, Stretch Center and Jade brands. Byrne said a decision will be made by the IHRSA show in late March about how to integrate the brands and how the names will be used or combined going forward.
With Precor on the growth track, SNEWS of course asked what was next. Byrne said the future was an open door.
"The direction we'll focus on is delivering a complete package," he said, "so anything that fits into our vision is fair game."
SNEWS View: Of course, it's not news that Precor lacked a commercial strength component to its line to be as fully competitive as it could be with other industry leaders, and that it was stalking one. This will help the company step up alongside others and perhaps even gain a stronger foothold very quickly in Europe. For months now, we could hear some parts of the industry cheerleading on the sidelines for the two companies to get the deal done. We think this should allow the Icarian brand, products and reputation to stay alive, too, in contrast to other acquisitions where the acquired company (think Tectrix as one good example) simply, unfortunately, disappeared. The IHRSA show should be quite the coming-out party.