Houston, Texas - Deep Down Inc. is to buy Flotation Technologies Inc., which specialises in production of deepwater buoyancy systems, for about $23.3 million.
Two specialities of Biddeford, Maine-based Flotation Technologies are Flotec syntactic foam and polyurethane elastomer products. The company's turnover for the year to 31 March 2008 was about $17.27 million, with pretax income of $4.84 million, and earnings (EBITDA) of $5.26 million.
With extensive engineering, design, fabrication, and analysis capabilities, Flotation Technologies offers "quick turnaround, cost-effective buoyancy and elastomer products to the worldwide oceanographic, offshore energy, seismic, and military markets," said a 17 April statement from Deep Down.
"Buoyancy will become more important as the offshore energy industry continues its trend toward exploration and development activities in ultra-deep waters," said Robert Chamberlain Jr, Deep Down's chairman and chief acquisition officer, in the announcement of the deal.
This acquisition will give Deep Down a major product line, position the Company to become a leader in flotation systems, and increase our presence in deepwater operations," he added. Deep Down is currently a service provider and installer, with no manufacturing capability.
Ronald Smith, Deep Down's president and ceo said, "Our view of the future of subsea equipment involves structural integration of buoyancy into various components of the undersea distribution system," adding that its prominence in installation of subsea equipment globally has meant that customers "are increasingly asking us to supply the equipment and systems we install."
The deal remains is subject to several conditions and Houston-based Deep Down has yet to gain financing for the purchase, the group said.