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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 25, 2000
THE TITAN CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-6035 95-2588754
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(State or other jurisdiction (Commission (IRS Employer
of incorporation File Number) Identification No.)
3033 Science Park Road, San Diego, California 92121
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (858) 552-9500
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Effective February 25, 2000, A T Acquisition Corp. ("Merger
Sub"), a Delaware corporation and a wholly-owned subsidiary of The Titan
Corporation (the "Registrant"), merged (the "Merger") with and into Advanced
Communication Systems, Inc., a Delaware corporation ("ACS"), pursuant to an
Agreement and Plan of Merger, dated as of December 9, 1999, as amended as of
January 20, 2000, among the Registrant, Merger Sub and ACS (the "Merger
Agreement"). ACS was the surviving corporation in the Merger and became a
wholly-owned subsidiary of the Registrant. A copy of the press release
announcing the consummation of the Merger is filed as Exhibit 99.1 to this
report.
At the effective time of the Merger (the "Effective Time"),
each issued and outstanding share of common stock, par value $.01 per share, of
ACS (the "ACS Common Stock") other than ACS Common Stock, if any, owned by the
Registrant, Merger Sub or ACS, which was canceled) was converted into the right
to receive 0.5677 (the "Exchange Ratio") of a share of common stock, par value
$.01 per share of the Registrant (the "Titan Common Stock"). Pursuant to the
Merger Agreement, the Exchange Ratio was equal to 22 divided by 38.75, which
was the average of the closing sale prices of the Titan Common Stock on the New
York Stock Exchange for the ten trading days ending on February 23, 2000. No
fractional shares of Titan Common Stock will be issued in connection with the
Merger. Instead, fractional shares will be rounded up or down to the nearest
whole share of Titan Common Stock. In connection with the Merger, holders of ACS
Common Stock immediately before the Merger will receive Titan Common Stock
representing approximately 11% of the Titan Common Stock outstanding after
giving effect to the Merger.
At the Effective Time, the Registrant assumed the obligations
of ACS with respect to each option to purchase ACS Common Stock outstanding
under ACS director and employee stock plans immediately before the Merger. In
connection with the Merger, each assumed option was converted into an option to
purchase, on the same terms and conditions as were applicable to such options,
that number of shares of Titan Common Stock reflecting an adjustment of the
exercise prices of the assumed options based on the Exchange Ratio.
It is intended that the Merger will be accounted for by the
Registrant as a pooling of interests in accordance with generally accepted
accounting principles. The Registrant expects that the Merger will constitute a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended.
The Registrant's Registration Statement on Form S-4
(Registration No. 333-95245), which was declared effective by the Securities and
Exchange Commission on January 24, 2000 (the "Registration Statement"), sets
forth certain information regarding the Merger, the Registrant and ACS. Such
information in the Registration Statement includes, but is not limited to,
information regarding the date and manner of the Merger, a description of the
assets involved, the nature and amount of consideration paid by the Registrant
therefor, the method used for determining the amount of such consideration, the
nature of any material relationship between ACS and the Registrant, any
affiliate, director or officer of the Registrant or any associate of any such
director or officer, the nature of the Registrant's business and ACS's business
and the Registrant's intended use of the assets acquired in the Merger.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Businesses Acquired. The
Registrant herewith files the following financial statements of ACS: (1) the
audited consolidated balance sheets of ACS as of September 30, 1998 and 1999 and
the audited consolidated statements of operations and changes in financial
position for each of the three years in the ended September 30, 1999 included in
ACS's Annual Report on Form 10-K for the fiscal year ended September 30, 1999,
as amended on Form 10-K/A, and (2) the unaudited consolidated balance sheet of
ACS as of December 31, 1999 and the unaudited consolidated statements of
operations and changes in financial position for the quarterly period ended
December 31, 1999 included in ACS's quarterly report on Form 10-Q for the
quarter ended December 31, 1999.
(b) Pro Forma Financial Information. The Registrant will
file the pro forma financial information giving effect to the Merger by
amendment to this report within the period specified in Item 7(b)(2).
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(c) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
2.1 Agreement and Plan of Merger, dated as of December 9,
1999, as amended as of January 20, 2000, among the
Registrant, Merger Sub and ACS (incorporated by
reference to Exhibit 2.1 to the Registrant's
Registration Statement on Form S-4 (No. 333-95245).
99.1 Press Release dated February 28, 2000. Filed herewith.
*99.2 Audited consolidated financial statements of ACS as
of September 30, 1998 and 1999 and for each of the
three years in the period ended September 30, 1999
(incorporated by reference to ACS's Annual Report on
Form 10-K for the fiscal year ended September 30,
1999 filed on December 29, 1999, as amended on Form
10-K/A filed on January 21, 2000).
*99.3 Unaudited consolidated financial statements of ACS
for the quarterly period ended December 31, 1999
(incorporated by reference to ACS's quarterly report
on Form 10-Q for the quarter ended December 31, 1999
filed on February 14, 2000).
99.4 Consent of Arthur Andersen LLP, independent public
accountants with respect to ACS. Filed herewith.
</TABLE>
* The ACS Commission File No. is 0-22737
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
THE TITAN CORPORATION
By: /s/ Nicholas J. Costanza
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Nicholas J. Costanza
Senior Vice President and
General Counsel
Date: March 9, 2000
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EXHIBIT 99.1
TITAN PRESS RELEASE
TITAN ACQUISITION OF ADVANCED COMMUNICATION SYSTEMS CLOSES
SAN DIEGO, CA -- February 28, 2000 - THE TITAN CORPORATION (NYSE: TTN) today
announced that the previously announced acquisition of Advanced Communication
Systems has closed. The closing of the transaction followed a vote by Advanced
Communication Systems shareholders approving the transaction. As a result of the
transaction, shareholders of Advanced Communication Systems will receive .57
shares of Titan common stock for each share of Advanced Communication Systems in
a tax-free exchange accounted for as a pooling of interests. The ratio was
determined based on the average closing price of Titan common stock on the NYSE
for the ten trading days ending February 23, 2000.
The Advanced Communication Systems acquisition nearly doubles the size of
Titan's technical workforce and greatly expands Titan's customer base. Advanced
Communication Systems recently announced a new 5-year contract with the Air
Force with a potential value of $50 million, significantly strengthening Titan's
relationship with the Air Force. Advanced Communication Systems also provides
Titan's technology incubator several new technologies which may have the
potential for commercialization. The acquisition brings the annual run rate in
Titan Systems Corporation, Titan's defense information technology business, to
more than $600 million, increases backlog to more than $1.6 billion, and
significantly increases cash flow, providing Titan with additional dollars to
invest in its rapidly growing commercial businesses -- e-business solutions,
satellite telephony, and food pasteurization.
Headquartered in San Diego, California, The Titan Corporation is an incubator of
technology based commercial businesses, offering innovative technical solutions.
Three of Titan's four core businesses develop and deploy communications and
information technology solutions and services. In addition, Titan markets the
leading technology for the electronic pasteurization of food products and is
continually identifying promising technologies suitable for commercialization.
The company has 5,400 employees, annualized sales of approximately $725 million
and total backlog in excess of $1.6 billion.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: The statements contained in this release which are not historical facts,
including our outlook on the future performance of our core businesses and our
growth strategies, are forward-looking statements that are subject to risks and
uncertainties that could cause actual results to differ materially from those
set forth in or implied by forward-looking statements. These risks and
uncertainties include the Company's entry into new commercial businesses,
dependence on continued funding of U.S. Department of Defense programs,
government contract procurement and termination risks, risks associated with
acquiring other companies, including integration risks, and other risks
described in the Company's Securities and Exchange Commission filings.
INVESTOR RELATIONS CONTACT:
Rochelle Bold
VP Investor Relations
Titan Corporation
(858) 552-9400 -- [email protected]
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EXHIBIT 99.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form 8-K of our report dated November 12, 1999, included in
Advanced Communication Systems, Inc.'s Form 10-K, for the fiscal year ended
September 30, 1999. It should be noted that we have not audited any financial
statements of the company subsequent to September 30, 1999 or performed any
audit procedures subsequent to the date of our report.
/s/ Arthur Andersen LLP
Vienna, Virginia
March 8, 2000
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