Bahrain-based investment management firm Arcapita announced the signing of an agreement to sell Varel International Energy Services, Inc. (Varel), a leading manufacturer of drill bits for the oil and gas, and mining and industrial industries, to Sweden-based Sandvik AB for a total transaction value of approximately $740 million. The closing of the transaction is subject to standard regulatory approvals and certain environmental due diligence. It is likely that the sale will be finalized within in the first six months of 2014.
Headquartered in Texas, United States, Varel conducts business in over 60 countries through its operating divisions. The company employs over 1,300 personnel and has primary manufacturing and management facilities in the United States, Mexico, France, Scotland and Russia. In addition, the company has significant regional sales and service or research facilities in the United States, Canada, Peru, France, the UAE, Kazakhstan, Malaysia and Australia.
Kevin Keough, a Director at Arcapita said, “Since Arcapita’s acquisition of Varel in 2007 the company has continued to expand its product offering and global presence, maintaining its status as the largest independent and fastest growing drill bit company in the world. The management team, led by CEO Jim Nixon, and with the support of Arcapita and the company’s board of directors, has done an outstanding job of building a world-class organization that has created significant value for investors.” Through a combination of organic growth and the acquisition of DHP, the company has grown sales significantly in 6 years.
Atif A. Abdulmalik, Arcapita’s Chief Executive Officer, added, “The Arcapita team worked closely with the management of Varel to develop and deliver a strategy that propelled the business to a market leadership position and we are delighted with this outcome. Arcapita continues to focus on maximizing value and delivering successful exits to its investors.”
