Varco Says It Plans to Buy Cooper’s Martin Decker Unit

Seeking to expand its product line to serve a recovering oil industry, Varco International said Friday that it plans to buy the Martin Decker division of Cooper Industries for about $30 million in cash.

Varco, an Orange-based firm that makes products used in oil exploration, said it hopes to complete the purchase within 60 days, pending negotiation of a definitive agreement and approval from the Federal Trade Commission. Also, Varco must obtain the final approval of its board of directors.

Martin Decker, based in Austin, Tex., is a leading producer of rig instrumentation equipment that is sold to the same customers who buy Varco’s drilling equipment for oil exploration.

The acquisition could increase Varco’s annual sales by nearly 30%. Varco’s sales in 1989 were $87 million, while Martin Decker has annual sales of about $25 million.

Varco’s officials said they were uncertain whether Martin Decker’s 200-person work force would remain intact after the acquisition. But they said Martin Decker would retain its name and continue to operate as a separate unit in Austin.

Martin Decker was headquartered in Santa Ana from 1969 to 1983, but Varco officials said they have no plans to move the company back to Orange County.

Sam Z. Albright, senior vice president with Howard, Weil Financial Corp., a New Orleans investment bank specializing in energy issues, said Martin Decker would be an “excellent fit” for Varco’s business.

Ellen H. Myers, a spokeswoman for Cooper Industries, a $5.1-billion manufacturer of electrical products and machinery based in Houston, said Martin Decker didn’t make a good match with Cooper’s other divisions that serve the production segment of the oil industry and use different sales and distribution channels.

In the last nine months, Varco’s business has begun to grow, primarily because of an increase in offshore oil exploration, Albright and Varco officials said.

“Drilling exploration is beginning to show signs of recovery,” said Don Stichler, Varco’s controller. In the first quarter of 1990, he said, the company received orders for 25 of its “top-drive drilling systems,” which are used to prevent oil pipes from sticking in the ground during drilling. By contrast, the company sold only 43 top drives in all of 1989, he said.