Pacific Cycle, maker of Schwinn, GT and Mongoose bikes, is continuing its expansion in the recreation and fitness category with the acquisition of Minnesota-based InSTEP, the nation’s leading producer of jogging strollers and bicycle trailers. The deal was finalized today for an undisclosed amount.

Pacific founder and CEO Chris Hornung said the acquisition takes advantage of Pacific’s Asian import infrastructure and retail distribution model. “Pacific has created an infrastructure that allows us to bring better quality products to consumers, at a better price, and distribute them to consumers where they shop everyday,” Hornung said. “This business model has powered our sales to a 250 percent increase in the past two years, and has allowed us to build and acquire powerful brands that are redefining the category of consumer recreation.”

As a manufacturer of products for active families, InSTEP will add a wide range of recreation products to Pacific’s already growing brand portfolio. Pacific recently expanded its three power brands — Schwinn, GT and Mongoose – into in-line skates, skateboards and recreational clothing, and InSTEP has been a key licensee in executing that strategy.

Now InSTEP will enable Pacific to add a host of other products to its portfolio, including jogging and convenience strollers, infant frame carriers , travel beds, bicycle trailers, massage tables, push golf carts, outdoor furniture, watercraft carriers, snowshoes and recreational gasoline pumps.

Hornung said the distribution models for the two companies are very similar, with strong relationships in sporting good stores and mass merchandising retailers. Last fall, Pacific launched its Schwinn brand into Wal-Mart, Target and Toys R Us where it had already launched its Mongoose brand several years earlier. Likewise, InSTEP is strong at mass merchandising retailer Target, and in sporting goods chains such as Cabela’s, The Sports Authority, Gart Sports, and Dick’s.

“Adding InSTEP to our portfolio will allow us to strengthen our distribution channel while broadening the definition of recreation and fitness,” commented Hornung. “The two companies provide an outstanding strategic fit for carving out a larger share of the active recreation market.”

Hornung said InSTEP president Paul Kahmann will stay on with Pacific in a consultant role, while Tom Schultz, InSTEP’s Vice President for Sales and Marketing, will become Pacific’s new vice president heading up InSTEP. Hornung said the acquisition will be transparent to customers and that business will run as usual. Commenting on the acquisition, Schultz said, “The strategic alignment between Pacific and InSTEP will allow us to bring new and better recreation products to our customers. Product innovation will increase in importance while we continue to strive for operational excellence.”