Oilfield service firm National Oilwell Varco (NOV) announced the acquisition of two Asia-based private companies in cash transactions worth about $160 million in total. The purchases include South Korean manufacturing and fabrication outfit Hochang Machinery Industries Co. Ltd. and Singapore-based oil and gas inspection, repair and maintenance provider South Seas Inspection (S) Pte Ltd.

Hochang Machinery Industries Co. Ltd., already a supplier of equipment fabrication services to National Oilwell Varco, employs about 600 people and has facilities in Ulsan and Geoje , South Korea . The acquired company will be part of National Oilwell Varco’s Rig Technology segment and is expected to bolster fabrication capabilities within the unit.

The second acquisition, that of South Seas Inspection (S) Pte Ltd., is aimed at complementing National Oilwell Varco’s Petroleum Services & Supplies segment by expanding regional coverage and adding new derrick inspection and assembly services. South Seas Inspection, which has about 140 workers, has operations spread over seven countries including Singapore, Brazil and Azerbaijan.

The transactions are part of National Oilwell Varco’s strategy to cash on opportunities that enhance shareholder value and strengthen customer service capabilities. Though the industry-wide slump still continues to weigh on the Houston-based company’s profits, National Oilwell Varco’s long-term outlook remain positive. Given its strong balance sheet, backlog of almost $9 billion, and leading market position, National-Oilwell Varco remains better positioned to navigate the current downturn than many of its peers. Recently, it reported third-quarter earnings that were below year-earlier levels but managed to surpass estimates, helped by robust performance from its Rig Technology segment.

National-Oilwell Varco is a world leader in the design, manufacture, and sale of comprehensive systems, components, products, and equipment used in oil and gas drilling and production worldwide. We currently rate National Oilwell Varco shares as Neutral.

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