Houston, Texas - Oilfield services company Deep Down Inc. has agreed an amendment to its agreement about buying Cuming Corp. The amendment has extended the date by which Deep Down or the selling stockholders may terminate the purchase agreement until 31 Oct 2010.
The amendment also revised the components of the purchase price from (a) 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 to (b) a cash payment of $48.25 million plus or less an amount for net customer deposit assets or net customer deposit liabilities, respectively.
Currently Cuming estimates this additional amount to be about $1.9 million on 31 Oct 2010. The amendment also increased the target net working capital from $9.1 million to $17.35 million.
The company plans to finance the acquisition with a combination of debt and equity and said in a 6 Oct announcement that it is actively engaged in negotiating final terms with a private equity firm and a commercial bank. Nevertheless, consummation of the transaction remains subject to several conditions including Deep Down's obtaining adequate external financing to fund the purchase price.
Privately-held Cuming was founded in 1980 and Deep Down says it is a leading manufacturer of buoyancy and insulation products with a wide range of deepwater oil and 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.