Connected-fitness company Peloton Interactive (NASDAQ: PTON) agreed to acquire fellow fitness company Precor after the market closed on Monday. The $420 million acquisition expands Peloton's manufacturing capabilities, grows its potential customer base, and benefits from Precor's experience and research/development teams. At the end of the first quarter of its fiscal 2021, Peloton had $2 billion in cash, cash equivalents, and marketable securities. While the company's official press release didn't disclose how its acquisition of Precor will be financed, Peloton has enough cash on hand to fund the deal if it so chooses. Image source: Peloton Interactive. Precor has operations around the world, but Peloton seems most interested in its manufacturing capabilities in North Carolina and Washington. Peloton's supply chain has struggled in 2020 due to unprecedented demand, and customers have endured long wait times. Part of the company's solution to this problem was establishing manufacturing facilities in the U.S. Today's acquisition of Precor helps with this. Peloton could also be expanding its customer base. Until now, the company's treadmill and stationary bike products have been used in households. However, Precor's business has many commercial customers, including hotels and colleges. Therefore, this acquisition could be a sneaky way for this growth stock to expand its total addressable market. While there were certain things investors likely expected from Peloton in 2021, a splashy acquisition like this comes as a surprise for many. Accordingly, Peloton stock was up 9% after hours as investors digested the news. 10 stocks we like better than Peloton InteractiveWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Peloton Interactive wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of November 20, 2020 Jon Quast has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Peloton Interactive. The Motley Fool has a disclosure policy.Source