Houston-based oilfield services company Deep Down and an affiliate of private investment fund group York Capital Management have formed a new joint venture – Cuming Flotation Technologies.
The new JV combines the operations of Deep Down‘s Flotation Technologies subsidiary and Cuming Corp.
Deep Down contributed the assets and liabilities of Flotation Technologies into a new entity, Flotation Tech (Flotec), plus $1.4m in cash to the JV in exchange for a 20% equity interest.
York Capital Management contributed $22.35m in cash in exchange for an 80% interest.
The cash contributions will be used to partially fund the acquisition of Cuming Corp by the JV, with York Capital Management providing a bridge loan to fund the balance of the $42m purchase price and to provide working capital.
Deep Down will provide certain technical, administrative and management services to the JV on a cost reimbursable basis.
Cuming Corp is engaged in the design and manufacture of syntactic foam flotation products and insulation materials for the offshore oil and gas industry.