Deep Down, Inc. (OTC Bulletin Board: DPDW), an oilfield services company specializing in products and services for the deepwater and ultra-deepwater oil and gas industry, announced entry into a conditional purchase agreement to acquire Cuming Corporation. Privately-held Cuming Corporation was founded in 1980 and is a manufacturer of buoyancy and insulation products with a range of deepwater oil & gas industry applications. Cuming's operations are 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 $37m in the form of a combination of cash and shares of Deep Down and assume approximately $13m 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 $73m and $15m, respectively. As of March 31, 2010, the business had contracted backlog and signed letters of intent representing approximately $138m and $32m 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 $34m cash component of the purchase price.
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. Mayeux brings over 25 years of financial management experience in the energy sector to Deep Down. Prior to joining Deep Down, Mayeux served as Vice President Finance and Treasurer of Willbros Group, where she played a pivotal role in that company's financial turnaround. Mayeux also previously served as Vice President and Corporate Controller of Weatherford International where she worked with 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. Mayeux is a CPA and began her career at Deloitte & Touche.