North-east oilfield equipment firm Downhole Products has changed hands as part of a £450million-plus deal.
Global energy service group Varel International Energy Services (VIES) said yesterday it had agreed to a takeover by Swedish firm Sandvik.
It means a new owner for Varel’s Portlethen-based subsidiary, Downhole Products.
The acquisition comes less than six years after Downhole Products’ three founders – Bill Barron, Alistair Clark and Ian Kirk – sold their majority stake in the business to Texas-based Varel, but kept minority holdings.
Sandvik’s £451million takeover, which is subject to standard regulatory approvals and environmental due diligence, is expected to be complete in the first half of this year.
It is one of the larger acquisitions in Sandvik’s history and also its first major entry into the upstream oil and gas industry.
Varel will become a standalone entity within the new owner’s Sandvik Venture division.
Tomas Nordahl, Sandvik Venture president, said: “This acquisition will provide a great platform to enable Sandvik to enter into drilling solutions in the oil and gas sector.”
Varel president and chief executive Jim Nixon said: “Sandvik’s extremely strong materials science research, manufacturing knowledge, global presence and financial capabilities will enable VIES to continue to enhance our capabilities to serve our global customer base.”
VIES supplies products, solutions and services to a broad cross-section of clients including oil and gas majors, surface mine operators and industrial drilling businesses.
The group employs more than 1,300 people and has primary manufacturing and management facilities in Aberdeen as well as the US, Mexico, France and Russia.
The company has significant regional sales and service or research facilities in the US, Canada, Peru, France, the United Arab Emirates, Azerbaijan, Malaysia and Australia.
Downhole Products designs, manufactures and markets a range of innovative products used in the construction and completion of wells.
It also has a global presence, with offices in the US, the Middle East, Azerbaijan, Malaysia and Australia. The firm employs nearly 100 people worldwide, including around 60 at Portlethen.