Swedish engineering group Sandvik AB today struck a deal to buy Bahrain-based Varel International Energy Services Inc – a US-based manufacturer of drill bits for the oil and gas, mining and industrial industries, from Bahrain-based investment firm Arcapita, for $740 million.
Varel is a global supplier of drilling solutions focusing on drill bits, downhole products for well construction and well completion.
Its main customers are from the oil and gas sector, and some from the mining and construction industries.
The Texas-based company has manufacturing sites in Houston, Mexico, Scotland, France, and Russia.
The company has significant regional sales and service or research facilities in the US, Canada, Peru, France, the UAE, Kazakhstan, Malaysia and Australia.
It had revenues of around $340 million in 2013 and has about 1,300 employees.
"The acquisition continues to position Sandvik in attractive growth segments where we will deliver solutions that increase customers' productivity. This is in line with Sandviks growth ambition and a way to leverage our technical know-how and Varel's market position", said Olof Faxander, Sandvik's president and CEO.
Sandvik is a high-technology, engineering group specialising in tooling, materials technology, mining and construction and conducts business in more than 130 countries.
The Stockholm-based company had annual sales of approximately $15 billion in 2012.
The company today reported a weaker-than-expected fourth-quarter performance with sales falling 8 per fent to 21.77 billion kronor from 24.33 billion kronor in the year-earlier quarter. Operating profit adjusted for nonrecurring charges dropped to 2.39 billion kronor from 3.06 billion kronor.