Sandvik will acquire drilling consumables company Varel International Energy Services.
Varel, which is a global supplier of drill bits and downhole products for well construction and well completion, was purchased for USD $740 million.
Sandvik stated that acquisition is designed to expose it to the oil and gas space.
“The acquisition forms a platform to enable Sandvik to enter into drilling solutions in the oil and gas sector. The combination of Varel’s solid market position and strong customer offering, and Sandvik’s broader drilling solutions capabilities as well as the extensive knowledge in highly relevant materials and cutting technology will support Varel's continued growth,” Sandvik Venture president Tomas Nordahl said.
Jim Nixon, Varel’s CEO, added that “[Varel] will operate as a stand-alone entity within the business area Sandvik Venture and, as a result, we anticipate only positive impact to product delivery and customer support. Sandvik’s extremely strong materials science research, manufacturing knowledge, global presence and financial capabilities will enable VIES to continue to enhance our capabilities to serve our global customer base.”
According to Sandvik, Varel, which has manufacturing sites in the US, Scotland, France, Russia, and Mexico, recorded revenues of USD $340 million last year, and has around 1300 employees.