Sandvik said it had agreed to purchase Varel International Energy Services or VIES in a deal valued at about $740 million, The Dealbook reported. Based in Sweden, Sandvik is a high-technology engineering group that has tools and machinery for metalworking, rock excavation, stainless steel, special alloys and resistance heating materials as well as process systems.

VIES, meanwhile, is a Texas-based company that provides a comprehensive suite of roller cone and fixed cutter drill bits for the oil and gas, mining and industrial markets with. Its three operating units include Oil and Gas, Mining and Industrial and Downhole Products.

The report said the transaction would enable Sandvik to enter the arena of providing drilling equipment for the oil and gas industry. Sandvik already gives specialized equipment for firms in the mining and construction industries. It also provides the aerospace, automotive and chemical industries with metal-cutting tools and other products.

In a statement, Sandvik Venture President Tomas Nordahl said Varel's solid market position and its strong customer offering combined with the broader drilling solutions capabilities and deep knowledge of Sandvik will serve to support the continued growth of Varel. He added that he is impressed with the Varel team and looks forward to their joint opportunities.

VIES President and Chief Executive Officer Jim Nixon also said in the statement, "VIES will operate as a stand-alone entity within the business area Sandvik Venture and, as a result, we anticipate only positive impact to product delivery and customer support. 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."

Varel is a privately-held firm established in 1947. Last year, it posted revenue of around $340 million and has a workforce of around 1,300 people, The Dealbook reported.