Varco Acquires Another Part of Baker Hughes

Varco International Inc. said Wednesday that it had acquired the assets of the Totco division of Exlog Inc., a subsidiary of Baker Hughes Inc., in a stock and cash transaction valued at more than $41 million.

The deal calls for Varco, Orange-based maker of oil and gas drilling equipment, to put up slightly more than 2.3 million shares of its common stock and about $20 million in cash. With Varco’s stock closing at $9.25 Wednesday, up 25 cents, the stock portion was worth an estimated $21.7 million.

The Totco division makes, sells and rents oil and gas drilling equipment. For the year ending Sept. 30, the division reported pretax income of $3.6 million on revenues of $28.1 million.

The purchase is Varco’s second since May when it acquired the Martin-Decker division of Houston-based Cooper Industries Inc. for $30 million. Martin Decker makes instruments, pipe-handling equipment, and measurement and monitoring devices for the oil industry and other heavy industries.

Varco President George Boyadjieff said the two purchases make Varco the leading manufacturer of rig instrumentation equipment, which is a market he expects to grow substantially.

This is the second time Varco has bought part of Baker Hughes, the Houston-based supplier of equipment and services to the drilling and refining industries. In 1988, Varco acquired the Bryon Jackson Machinery division, a maker of hoisting tools used in drilling rigs, for $35 million.