Peloton (PTON) saw its stock price surge more than 11% in the early morning hours Tuesday after announcing it was acquiring commercial fitness equipment company Precor in hopes of bolstering its U.S. manufacturing presence.

Peloton, which scooped up Precor in a deal valued at $420 million, has been plagued with delivery delays during the pandemic. Distribution on its Bike and Tread fitness products have often extended months as the demand for at-home fitness equipment soared.

With the purchase of Precor, it is expected that Peloton will be able to cut down those delays as the fitness equipment company has an established U.S. manufacturing network that includes over 600,000 square feet of production space.

Precor has in-house tooling, fabrication, product development, and quality assurance capabilities located in Whitsett, North Carolina, and Woodinville, Washington. Peloton has Tonic facilities in Taiwan and uses third-party manufacturers.

Peloton said that it will be able to deliver its fitness products to consumers “sooner” because Precor’s production facilities are located in the U.S., where it can control the entire production process from “design to ship” while increasing quality.

The deal is also expected to accelerate Peloton’s push into the commercial fitness sector by leveraging Precor’s experience in the segment.

Precor is a division of Finnish sporting goods company Amer Sports, which was owned by ANTA Sports, FountainVest Partners, Anamered Investments Inc., and Tencent Holdings Limited. The company has relationships with hotels, multifamily residences, and college and corporate campuses.

Through the purchase, Precor will operate as a business unit under Peloton’s umbrella, led by Rob Barker, who will become the company’s CEO. Barker will report to Peloton President William Lynch.

“Precor embodies the Peloton mission of putting members first,” Lynch said. “Over the last few months, we've gotten to know the team and saw firsthand how much they care about their products, customers, and, last but not least, their employees.

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.”

Peloton said it will add about 100 R&D employees to its team and expects the Precor deal to close in early 2021.

Shares of Peloton were trading at $160.95 as of premarket open on Tuesday, up $16.56 or 11.47%. At 10:28 a.m., shares were up 12.95%.

A Peloton stationary bike sits on display at one of the fitness company's studios on Dec. 4, 2019, in New York City. Scott Heins/Getty Images