A Vancouver company is looking to bulk up, and it has its eyes on some new equipment.
Nautilus Inc. announced Monday it had acquired Octane Fitness LLC for $115 million.
“We’re adding a few more cylinders to the engine,” Nautilus CEO Bruce Cazenave said during an investor call.
Nautilus closed the deal before the end of the year Thursday, using a new $80 million loan and cash to buy Octane from its current owner, the private equity firm North Castle Partners of Greenwich, Conn.
“This transaction adds a leading fitness brand, unique products and technologies, broadens distribution and deepens our talent pool,” said Bill McMahon, chief operating officer of Nautilus, in a statement.
Octane, a fitness equipment company headquartered in Minnesota, has about 80 employees. Its revenues for 2015 are expected to hit $65 million.
“This combination of two industry leaders provides our team members with a unique opportunity to continue to focus on our core products and channels, while benefiting from Nautilus’ added expertise and broader resources,” Octane Fitness CEO Dennis Lee said in a statement.
Octane will continue operating in Brooklyn Park, Minn., Nautilus said.
The acquisition is a big step for Nautilus, which just a few years ago was regularly posting quarterly losses.
Nautilus had revenues of $274.4 million in 2014.
“The acquisition of Octane Fitness is a significant milestone for Nautilus and will meaningfully accelerate our strategic growth initiatives,” Cazenave said. He added the acquisition will broaden Nautilus’ reach in international markets, add more expensive products to its offerings and open new distribution channels.
Nautilus brands are largely distributed direct-to-consumer and through third-party retailers. Octane equipment has distribution to specialty fitness stores as well as gyms, corporate campuses, professional sports teams, governments and armed services.
Octane was founded in 2001 by Dennis Lee and Tim Porth. The business quickly grew from one elliptical machine to zero-impact equipment and training programs. Octane in September won a copyright infringement lawsuit brought against it.
At the time of the sale, Lee was CEO and Porth an executive vice president. The two will continue working for Nautilus, Lee as vice president general manager, commercial and specialty, and Porth as vice president product development, commercial and specialty, both reporting directly to Cazenave.
Cazenave said Nautilus had looked at 100 companies to possibly acquire over the past year, noting that Octane’s culture was the best fit.
Investors appeared pleased with the acquisition, raising Nautilus’ stock price more than 10 percent, from $16.54 to $18.48, as of market close Monday.
