Sandvik said it has reached an agreement to acquire Varel International Energy Services Inc. for approximately $740 million. The closing of the acquisition is subject to standard regulatory approvals and certain environmental due diligence.

Varel is a global supplier of drilling solutions focusing on drill bits, downhole products for well construction and well completion. Its primary customer segment is the oil and gas sector, with some presence in the mining and construction industries. Its manufacturing sites are located in Houston (USA), Matamoros (Mexico), Aberdeen (Scotland), Tarbes (France) and Kurgan (Russia). The head office is based in Carrollton,Texas, USA.

Revenues in 2013 were approximately $340 million. Varel will represent a new product area within the business area Sandvik Venture.

“The acquisition continues to position Sandvik in attractive growth segments where we will deliver solutions that increase customers’ productivity. This is in line with Sandvik’s growth ambition and a way to leverage our technical know how and Varel’s market position,” said Olof Faxander, Sandvik president and CEO.