Sandvik AB (STO:SAND) has reached an agreement to acquire Varel International Energy Services Inc. (Varel) for $740 million.
Varel is a global supplier of drilling solutions focusing on drill bits and downhole products for well construction and well completion. The company is headquartered in Carrollton,Texas.
Varel will form a new product area within the business area Sandvik Venture. The closing of the acquisition is expected to occur within the first six months of 2014.
The acquisition forms a platform to enable Sandvik to enter into drilling solutions in the oil and gas sector. Sandvik, headquartered in Sweden, is a global organization with operations in over 130 countries. The Varel acquisition represents one of the larger acquisitions in Sandvik’s corporate history, and, once completed, it will be the company’s first major entry into the upstream oil and gas industry.