Nautilus buys China-based manufacturer

VANCOUVER, Wash. --Fitness equipment maker Nautilus Inc. said Friday it acquired its largest contract manufacturer, China-based Land America Health and Fitness Co., for $72 million in cash.

The deal, which involves four manufacturing buildings, is expected to close on Jan. 2, 2008.

Nautilus said the acquisition will improve company gross margins by at least 1.5 percentage points to 2 percentage points in 2008. It will also help mitigate supply risks and expand the types of fitness equipment made at the facility, the company said.

Land America has manufactured Nautilus' Bowflex home exercise gym for more than eight years and began making the Bowflex TreadClimber last year.

Nautilus will continue to work with its other contract manufacturers in Asia and its domestic manufacturing plants in Oklahoma and Virginia to create growth and improve margins.

Shares of the company slipped 18 cents to close at $12.04.

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