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Strategies & Market Trends : Speculating in Takeover Targets -- Ignore unavailable to you. Want to Upgrade?

To: richardred who wrote (193)	9/16/2003 7:52:07 AM
From: richardred	Read Replies (1) \| Respond to of 7265

DJ Lockheed Martin Announces Pact To Buy Titan Corp>LMT TTN Dow Jones News Service ~ September 15, 2003 ~ 9:26 pm EST (MORE) Dow Jones Newswires 09-15-03 2126ET DJ Lockheed Confirms Plan To Buy Titan Corp For $22/Share (MORE) Dow Jones Newswires 09-15-03 2128ET DJ Lockheed Confirms Plan To Buy Titan Corp In $2.4B Deal (MORE) Dow Jones Newswires 09-15-03 2128ET DJ Lockheed To Assume $580M In Titan Debt (MORE) Dow Jones Newswires 09-15-03 2129ET *DJ Lockheed Sees Buy Immediately Adding To Earnings (MORE) Dow Jones Newswires 09-15-03 2129ET DJ Lockheed/Titan -2: Price Represents 29.7% Premium To Titan BETHESDA, Md. (Dow Jones)--Lockheed Martin Corp. (LMT) confirmed an agreement to acquire Titan Corp. (TTN) in a deal Lockheed expects to immediately add to earnings. The purchase price includes cash, stock and the assuumption of debt, valuing the deal at about $2.4 billion before accumulated tax benefits. In a press release Monday evening, Lockheed said Titan shareholders would have an option to receive $22 a share in cash, an equivalent amount of Lockheed stock, or a combination of both. The announcement confirmed a report earlier Monday evening by The Wall Street Journal, which cited people familiar with the transaction as saying Lockheed agreed to acquire Titan for $1.8 billion in cash and stock. The deal's terms also include the assumption of about $580 million in Titan debt. A $22-a-share purchase price would represent a 29.7% premium to Titan's closing price Monday of $16.96, down 12 cents, or 0.7%. Lockheed's shares closed Monday at $50.97, down 14 cents, or 0.3%. (MORE) Dow Jones Newswires 09-15-03 2146ET DJ Lockheed/Titan -3: Lockheed Sees No Regulatory Issues Titan, based in San Diego, derives the bulk of its sales from the U.S. government, an area where Lockheed already holds a strong presence. Lockheed spokesman Tom Jurkowsky estimated that 99% of Titan's sales, of which they posted $815 million for the first six months of this year, are to the government. Lockheed's sales breakdown includes 57% to the defense department and 23% to other U.S. government agencies, based on 2002 figures. When asked about possible regulatory issues, Jurkowsky termed the IT market as "pretty wide open" and suggested Lockheed felt it was in "good shape" in meeting all regulatory reviews tied to the acquisition. The acquisition of Titan adds a company with about 11,000 employees to Lockheed's staff of roughly 125,000 people. Monday's release made no mention of future plans for Titan's current staff. "We made this acquisition to grow," Jurkowsky said. Lockheed has no plans to close facilities, Jurkowsky noted, saying Titan's work force brings "a tremendous amount to the table." (MORE) Dow Jones Newswires 09-15-03 2213ET DJ Lockheed/Titan -4: Sees Closing Deal In Early 2004 Both boards have approved the transaction, which remains subject to approval from Titan shareholders. Lockheed expects to complete the acquisition in early 2004. Earlier Monday, Lockheed hiked its quarterly dividend to 22 cents a share from 12 cents, an 83% increase. Jurkowsky noted that Lockheed has stressed to its shareholders that it would be careful with acquisitions, setting three criteria -- strategic and operational capability, ease of integration and financial viability -- criteria Jurkowsky said Titan "clearly" met. Analysts expect Lockheed to earn $2.33 a share. Titan, which told analysts last week that revenue for 2003 would rise to between $1.73 billion and $1.79 billion from $1.39 billion a year ago, has been expected by analysts to earn 71 cents a share for 2003, on a pro forma basis. Titan lost $7.84 million, or 11 cents a share, from continuing operations in 2002. Looking to 2004, Titan said in July that it expects GAAP earnings between 84 and 88 cents a share on revenue between $2 billion and $2.1 billion. (MORE) Dow Jones Newswires 09-15-03 2231ET DJ Lockheed/Titan -5: Stk Portion Subject To Collar Titan's shareholders who elect to receive a stock consideration will receive $ 22 dividend by the average of the daily high and low sales prices of Lockheed shares for the 10 trading days prior to the third day before completion of the merger. The aforementioned terms are subject to collars of $58 and $46. According to Lockheed, the cash and stock portions paid will each equal 50% of the merger consideration. Titan was founded in 1981, and initially focused on classified work for the government before looking into commercial ventures. However, to benefit from renewed growth in military spending, Titan sold or spun off the commercial operations during the last few years. The last major deal in the government information technology sector was General Dynamics Corp.'s (GD) $1.2 billion June agreement to acquire Veridian Corp. (VNX). That deal closed on August 11. -Gregg Henglein; Dow Jones Newswires; 201-938-5400 (END) Dow Jones Newswires 09-15-03 2250ET