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Wednesday, February 5, 2014
Release
Varel International Energy Services, Inc. (VIES), the parent company of Varel International and Downhole Products, announces the signing of an agreement to sell the company, in its entirety, to Sandvik AB. The acquisition price amounts to approximately $740 million. The closing of the acquisition is subject to standard regulatory approvals, as well as certain environmental due diligence, and is expected to occur within the first six months of 2014.
Privately held VIES conducts business in more than 60 countries through three operating divisions: Varel Oil & Gas Drill Bits, Varel Mining & Industrial and Downhole Products (DHP). The company employs more than 1,300 and has primary manufacturing and management facilities in Carrollton and Houston, Texas; Matamoros, Mexico; Pau and Tarbes, France; Aberdeen, Scotland; and Kurgan, Russia.
In addition, the company has significant regional sales and service or research facilities in Denver, Colorado; Calgary and Edmonton, Canada; Lima, Peru; Paris, France; the UAE; Baku, Kazakhstan; Kuala Lumpur, Malaysia; and Perth, Australia. VIES supplies products, solutions and services to a broad cross-section of clients, including major oil and gas drillers and operators, surface mining operations and industrial drilling businesses.
Sandvik is a high-technology engineering group with advanced products and world-leading positions in selected areas: tools for metalworking, machinery and tools for rock excavation, stainless steel, special alloys, resistance heating materials and process systems. Headquartered in Sweden, Sandvik is a global organization with operations in more than 130 countries. The VIES purchase represents one of the larger acquisitions in Sandvik’s corporate history and, once completed, will be the company’s first major entry into the upstream oil and gas industry.
Sandvik selected VIES based on the company’s long history of delivering technology, quality, customer service, and superior growth in addition to the close ties to Sandvik’s core capabilities and competencies.
“VIES will operate as a stand-alone entity within the business area Sandvik Venture,” VIES President and CEO Jim Nixon said. “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 capability to serve our global customer base.”
“This acquisition will provide a great platform to enable Sandvik to enter into drilling solutions in the oil and gas sector,” added Tomas Nordahl, President of Sandvik Venture. “The combination of Varel’s solid market position and strong customer offering, along with Sandvik’s broader drilling solutions capabilities and extensive knowledge in highly relevant materials, will support Varel’s continued growth. I am very impressed by the Varel team, and I am excited about our joint opportunities going forward.”
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