May 5, 2010 (FinancialWire) — Deep Down, Inc. (OTCBB: DPDW), an oilfield services firm specializing in products and services for the deepwater and ultra-deepwater oil and gas industry, said it has entered into a conditional purchase agreement to acquire Cuming Corp, a privately-held manufacturer of buoyancy and insulation products.

According to Deep Down, Cuming’s products have a wide range of deepwater oil and gas industry applications. The company said that 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 plans to acquire 100% of the stock of Cuming for around $37 million in the form of a combination of cash and shares of Deep Down and assume around $13 million of net liabilities based upon Cuming’s balance sheet as of December 31, 2009.

In 2009, Cuming posted revenue and gross profit of around $73 million and $15 million, respectively, according to Deep Down. As of March 31, 2010, the business had contracted backlog and signed letters of intent representing around $138 million and $32 million of orders, respectively, the majority of which are scheduled for production in 2010.

The consummation of the transaction remains subject to several conditions including Deep Down's obtaining adequate external financing to fund the around $34 million cash component of the purchase price.

Houston-based Deep Down serves the worldwide offshore exploration and production industry with services and technological solutions including 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 service teams and engineered technological solutions.

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