Opening a new door
1947 was the year when the Polaroid camera was presented for the first time and George Marshall outlined the Marshall Plan for American reconstruction and after-war aid to Europe. The same year, Dan Varel founded a family business in Carrollton, Texas.
The company started out as a roller cone drill bit manufacturer. Varel Manufacturing remained a family owned business until 1998 when it was purchased in a management buy-in led by Jim Nixon, now President and CEO. At the same time, the name was changed to Varel International Energy Services Inc.
Through wise acquisitions, Varel International has grown to become a global supplier of drilling solutions focusing on drill bits, downhole products for well construction and well completion. In 2008, 2009 and 2011, Varel was recognized by the INC5000 as one of the fastest growing private companies in the US. In 2013, the company reported revenues of approximately 340 million USD and employed around 1,300 people around the globe.
Sandvik acquires Varel
On January 7th, Sandvik announced the agreement to acquire Varel to become a new, stand-alone product area within the business area Sandvik Venture. The acquisition price amounts to approximately 740 million USD and the objective is to form a platform to enable Sandvik to enter into drilling in the oil and gas sector.
"The combination of Varel's solid market position and strong customer offering, and Sandvik's broader drilling solutions capabilities as well as the extensive knowledge in highly relevant materials and cutting technology will support Varel's continued growth. I am very impressed by the Varel team and I am excited about our joint opportunities going forward", says Tomas Nordahl, President of Sandvik Venture.
Varel is headquartered in Carrollton, Texas and has main manufacturing centers in Houston, Texas, Matamoros in Mexico, Tarbes in France, Aberdeen in Scotland, Tarbes in France, and Kurgan in Russia.
"The acquisition continues to position Sandvik in attractive growth segments where we will deliver solutions that increase our customers' productivity. This is in line with Sandviks growth ambition and a way to leverage our technical know-how and Varel's market position", says Olof Faxander, Sandvik's President and CEO.
The closing is subject to standard regulatory approvals and certain environmental due dilligence and is expected to occure within the first six months of 2014.