Deep Down to Acquire Cuming Corporation; Names Gay Stanley Mayeux Chief Financial Officer
HOUSTON, May 3 /PRNewswire-FirstCall/ -- Deep Down, Inc. (OTC Bulletin Board: DPDW) ("Deep Down"), an oilfield services company specializing in products and services for the deepwater and ultra-deepwater oil and gas industry, today announced entry into a conditional purchase agreement to acquire Cuming Corporation (or "Cuming"). Privately-held Cuming Corporation was founded in 1980 and is a leading manufacturer of buoyancy and insulation products with a wide range of deepwater oil & gas industry applications. Cuming's operations are highly complementary with those of Deep Down's Flotation Technologies subsidiary, which produces syntactic foam products for customers in the oil and gas, defense, scientific and industrial sectors.
At the closing of the transaction, Deep Down expects to acquire 100% of the stock of Cuming Corporation for approximately $37 million in the form of a combination of cash and shares of Deep Down and assume approximately $13 million of net liabilities based upon Cuming Corporation's balance sheet as of December 31, 2009. In 2009, Cuming Corporation generated revenue and gross profit of approximately $73 million and $15 million, respectively. As of March 31, 2010, the business had contracted backlog and signed letters of intent representing approximately $138 million and $32 million of orders, respectively, the majority of which are scheduled for production in 2010. Consummation of the transaction remains subject to several conditions including Deep Down's obtaining adequate external financing to fund the approximately $34 million cash component of the purchase price.
Ronald E. Smith, Chief Executive Officer, stated, "The completion of this acquisition will solidify Deep Down as a leading provider of buoyancy solutions to the oil & gas and other industries. By combining our complementary technologies and customer bases, Deep Down is well positioned to capture a substantial share of the growing markets for deepwater buoyancy and subsea insulation. We are pleased to welcome the high quality team at Cuming into the Deep Down family and look forward to participating in the growth opportunities this strategic and transformational acquisition makes possible."
Separately, Deep Down announced the appointment of Gay Stanley Mayeux as Vice President and Chief Financial Officer of the company, effective immediately. Former CFO Eugene L. Butler will continue to serve as Executive Chairman of the company. Ms. Mayeux brings over 25 years of financial management experience in the energy sector to Deep Down. Prior to joining Deep Down, Ms. Mayeux served as Vice President Finance and Treasurer of Willbros Group, where she played a pivotal role in that company's financial turnaround. Ms. Mayeux also previously served as Vice President and Corporate Controller of Weatherford International ("Weatherford") where she worked with Mr. Butler and assisted him in developing and implementing a successful financial turnaround strategy for Weatherford. Ms. Mayeux has also held senior financial positions at energy services companies including McDermott International and Hydril Company. Ms. Mayeux is a CPA and began her career at Deloitte & Touche.
Mr. Butler commented on Ms. Mayeux's appointment, "I am delighted that we are able to recruit someone with Gay's talent and experience to help Deep Down pursue this next stage of its development. Gay will play an important role in completing the Cuming transaction and integrating the two operations. The expertise that Gay and our new independent director, Mark Hollinger bring to Deep Down will greatly assist the company in becoming a fast growing, consistently profitable enterprise."
As previously announced on April 12, 2010, Mark Hollinger recently joined Deep Down's Board of Directors as Chairman of the Audit Committee. Mr. Hollinger is currently President of Offshore Solutions at MacDermid, Inc. ("MacDermid"), which provides specialty fluids used for the hydraulic control of valves in the offshore drilling and production systems; a position he has held since September 2007. Prior to MacDermid, Mr. Hollinger served as President of Merix Corporation from May 1999 to January 2007 and Chief Executive Officer from September 1999 to January 2007.
About Deep Down, Inc.
Deep Down, Inc. is an oilfield services company serving the worldwide offshore exploration and production industry. Deep Down's proven 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 supports subsea engineering, installation, commissioning, and maintenance projects through specialized, highly experienced service teams and engineered technological solutions. The company's 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. More information about Deep Down is available at www.deepdowncorp.com.
Forward-Looking Statements
Information set forth in this document contain "forward-looking statements" (as defined in Section 21E of the Securities Exchange Act of 1934, as amended), which reflect Deep Down's expectations regarding future events. The forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those contained in the forward-looking statements. Such forward-looking statements include, but are not limited to, statements about the benefits of the business combination transaction involving Deep Down and Cuming, including future financial and operating results, whether and when the transactions will be consummated, the new combined company's plans, market and other expectations, objectives, intentions and other statements that are not historical facts.
The following additional factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the ability to obtain financing and approvals for the transaction; the risk that any synergies from the transaction may not be realized or may take longer to realize than expected; disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; the ability to successfully integrate the businesses, unexpected costs or unexpected liabilities that may arise from the transaction, whether or not consummated; the inability to retain key personnel; continuation or deterioration of current market conditions; future regulatory or legislative actions that could adversely affect the companies; and the business plans of the customers of the respective parties. Additional factors that may affect future results are contained in Deep Down's filings with the Securities and Exchange Commission ("SEC"), which are available at the SEC's web site http://www.sec.gov. Deep Down disclaims any obligation to update and revise statements contained in these materials based on new information or otherwise.
SOURCE Deep Down, Inc.
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