Deep Down, Inc. announced yesterday that they entered into an amendment to the purchase agreement, by and among Deep Down (the Company), Cuming Corporation (Cuming) and the selling stockholders (the Amendment) dated effective as of July 31, 2010, to provide for an extension of the exclusivity period and the date on which Deep Down or the selling stockholders may terminate the purchase agreement.
The Amendment also revised the components of the purchase price from approximately $37 million in the form of a combination of cash and shares of Deep Down and the assumption of approximately $13 million of net customer deposit liabilities based upon Cuming’s balance sheet as of December 31, 2009, to a cash payment of $48.25 million plus or less an amount for net customer deposit assets or net customer deposit liabilities, respectively.
Cuming currently estimates this additional adjustment amount to be a net customer deposit asset of approximately $1.9 million as of October 31, 2010. The Amendment also increased the target net working capital from $9.1 million to $17.35 million.
Deep Down, Inc. plans to finance the acquisition with a combination of debt and equity. They are actively engaged in negotiating final terms with a private equity firm and a commercial bank. However, consummation of the transaction remains subject to several conditions. This includes Deep Down’s obtaining adequate external financing to fund the purchase price.
Previously on May 3, 2010, the Company announced entry into the conditional purchase agreement to acquire Cuming. Privately-held Cuming, founded in 1980, is a leading manufacturer of buoyancy and insulation products with a broad spectrum of deepwater oil and gas industry applications. Cuming’s operations are highly complementary with those of Deep Down’s Flotation Technologies subsidiary. This subsidiary produces syntactic foam products for customers in the oil and gas, defense, scientific and industrial sectors. Deep Down expects to acquire 100 percent of the stock of Cuming at the closing of the transaction.
Headquartered in Houston, Texas, Deep Down, Inc. is an oilfield services company. They specialize in products and services for the deepwater and ultra-deepwater oil and gas industry. The Company serves the global offshore exploration and production industry. Their services and technological solutions include distribution system installation support and engineering services, umbilical terminations, loose-tube steel flying leads, distributed and drill riser buoyancy, ROVs and tooling, marine vessel automation, control, and ballast systems.
Deep Down, Inc. supports subsea engineering, installation, commissioning, and maintenance projects. They do this via specialized, highly experienced service teams and engineered technological solutions. Their primary focus is on more complex deepwater and ultra-deepwater oil production distribution system support services and technologies, used between the platform and the wellhead.
For more formation visit: www.deepdowncorp.com
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