National Oilwell Varco Inc. ( NOV - Analyst Report ) has completed the $670 million or 3.8 billion Danish Kroner acquisition of Denmark-based NKT Flexibles I/S ("NKT"). In early February, National Oilwell had first announced plans to buy NKT Flexibles.

Danish company NKT Holding and Norwegian firm Subsea 7 S.A., having a respective interest of 51% and 49%, formed NKT Flexibles to design and produce flexible pipe products and systems for the offshore oil and gas industry.

NKT Flexibles also manufactures products related to Floating Production, Storage and Offloading vessels (FPSOs) and other offshore vessels, plus subsea production systems including flow-lines and flexible risers.

With this acquisition, National Oilwell will reap benefits from NKT Flexibles’ advanced technical design capability and skilled manpower. The collaboration will also place National Oilwell in a commanding position in the offshore production market, as well as expand its global foothold by venturing into the developing sectors of the energy industry.

Following strong exposure in the FPSO market, National Oilwell also intends to sell about $150 million in equipment to FPSO, up from the earlier level of $120 million to $130 million.

Houston, Texas-based 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 like the company’s healthy backlog, solid balance sheet and strength in international operations, particularly in the Middle East and Brazil.

However, we think the current valuation is fair and adequately reflects the company’s future growth prospects. Hence, we maintain our long-term Neutral recommendation on the stock.

National Oilwell, which operates with other players such as Cameron International Corp. (CAM) and Weatherford International Ltd. (WFT), currently retains a Zacks #3 Rank (Hold rating) for the short run.