National Oilwell Varco Inc. (NYSE: NOV) is set to expand its wellbore technologies business—and extend its reach underground—with a purchase agreement for Trican Well Service Ltd.’s completion tools business.

The C$53.5 million (US$40 million) deal includes all material assets from Trican’s completion tools business in the U.S., Canada, Norway and Russia.

The purchase price includes C$30 million (US$22.9 million) cash and C$23.5 million (US$17.9 million) in NOV stock.

Tudor, Pickering, Holt & Co. (TPH) said the deal won’t have a significant financial impact but is “wonderfully strategic.”

“Via its wellbore technologies business—drilling fluids, drill pipe, downhole tools, drill bits—NOV touches more wellbores during the well construction process than any other company,” TPH said.

Trican's downhole tools are used for multistage fracturing and multi-zone completions, which allow producers to monitor the well operations, Raymond James & Associates said.

NOV’s manufacturing and supply chain muscle behind Trican’s team should mean incremental sales opportunities.

“We’d argue that NOV’s Completion & Production Solutions product offering has been more surface/subsea-centric vs. downhole-oriented until now,” TPH said.

Clay Williams, NOV’s chairman, president and CEO, said the transaction represents expands the breadth of its completion and production related product offerings.

NOV plans to buy the technology and hold on to Trican’s team.

“The transaction allows NOV to leverage our best-in-class manufacturing and global supply chain to expand sales into new markets and meet our customers' demands for cost-effective, innovative and high quality completion tools,” he said.

Trican, Canada’s leading pressure pumping company, will use cash proceeds to reduce its outstanding debt.

Trican president and CEO Dale Dusterhoft said the transaction will strengthen the company’s balance sheet and allow Trican to focus on its core remaining businesses.

“We believe NOV, with its leading global platform, will be able to provide continued technical leadership and customer support for the completion tools business,” he said.

The deal follows a March deal in which Trican sold its U.S. pressure pumping business to Keane Group for about $247 million.

Closing of NOV transaction is expected by June 30, the companies said. The deal is subject to NOV's application to the Russia Federal Antimonopoly Service and Norwegian Competition Authority.

Pursuant to the terms of the definitive agreement, Trican has agreed to provide certain transitional services following closing of the transaction on terms that are customary for transactions of this nature.

Darren Barbee can be reached at dbarbee@hartenergy.com.