Sandvik has reached an agreement to acquire Varel International Energy Services Inc., for $740 million. The closing of the acquisition is subject to standard regulatory approvals and certain environmental due diligence. Varel supplies drilling solutions focusing on drill bits and downhole products.

With manufacturing sites located in Houston, Matamoros, Mexico; Aberdeen, Scotland; Tarbes, France; and Kurgan, Russia; Varel is headquartered in Carrollton, Texas.

“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’s President and CEO. Varel has a strong presence in mining, but the acquisition more importantly forms a platform to enable Sandvik to enter into drilling solutions for the oil and gas sector.