Nautilus has exercised a purchase option to acquire the assets of China-based Land America Health and Fitness, its largest contract manufacturer, for $72 million following eight weeks of due diligence. The acquisition, which is expected to close in January 2008, is expected to increase the group’s gross margin by 1.5-2.0 percent in 2008. The purchase will give Nautilus four factories and 700,000 square feet of production space. Nautilus has been working with Land America for eight years through its production of Bowflex home gyms. The Chinese producer also began making Bowflex Treadclimbers last year.