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15 Sep 03. Lockheed Martin Corporation (NYSE: LMT – News) and Titan Corporation (NYSE: TTN – News) have entered into a definitive agreement for Lockheed Martin to acquire Titan. Under the merger agreement, shareholders of Titan may elect to receive $22 per share in cash, an equivalent amount of Lockheed Martin common stock or a combination. Shareholders who elect to receive all cash or stock will be subject to pro- ration, so that the aggregate amount of cash and stock paid will each equal 50 percent of the merger consideration. The total
value of this transaction, including the assumption of about $580 million of Titan debt, is approximately $2.4 billion before accumulated tax benefits.

Lockheed Martin expects the proposed acquisition to be immediately accretive to its earnings and to fund the cash portion of the merger consideration using existing cash and short-term investments. The transaction has been approved by the boards of directors of each company and is expected to close in the first quarter 2004, subject to approval by Titan shareholders, government regulatory reviews and other closing conditions described in the merger agreement.San Diego-based Titan Corporation provides C4ISR, enterprise IT and homeland security products and services, with over 11,000 employees in 41 states and 12 countries.

Nearly all of Titan’s sales are to the U.S. Government. For the first six months of this year, Titan reported sales of about $815 million, an increase of 24 percent compared to the first half of 2002. Titan provides comprehensive services, solutions and communications products through over 2,000 contracts and transformational programs to a wide range of customers, including the Department of Defense, Department of Homeland Security, intelligence and various civil agencies.

“Titan provides additional presence within the U.S. Government customer base and expands our competencies. Titan is an excellent fit with Lockheed Martin, and its acquisition is consistent with our disciplined growth and cash deployment strategies,” said Vance Coffman, Lockheed Martin chairman and chief executive officer.

“Titan’s outstanding record of sales growth and the quality of its workforce made this transaction very attractive to us. This workforce, together with our highly skilled people, allows us to provide more cost effective and robust solutions to customers of both companies. Our combined capabilities will continue to enhance the Defense Department’s transformational systems and focus on the evolving threats that face our country,” Coffman added.

“We are extremely proud of our track record of growth and dedicated service to our nation during our 22-year history,” said Titan chairman, president and chief executive officer Gene W. Ray. “Lockheed Martin is acquiring Titan to expand and grow the business. Together we will offer a broader spectrum of system and IT solutions to our customers. As such, I am confident that this match is a winner for our customers and employees.”

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