<PAGE>
Filed by: The Titan Corporation Pursuant to Rule 425 under the Securities
Act of 1933
Subject Company: AverStar, Inc.
THE FOLLOWING IS THE PRESS RELEASE DISSEMINATED BY THE TITAN
CORPORATION ON MARCH 27, 2000.
Investors and security holders are urged to read the proxy
statement/prospectus regarding the business combination transaction referenced
in the press release set forth below, when it becomes available, because it will
contain important information. The proxy statement/prospectus will be filed with
the Securities and Exchange Commission by The Titan Corporation. Investors and
security holders may obtain a free copy of the proxy statement/prospectus (when
it is available) and other documents filed by The Titan Corporation with the
Commission at the Commission's web site at www.sec.gov. The proxy
statement/prospectus and these other documents may also be obtained for free
from The Titan Corporation by directing a request to The Titan Corporation, 3033
Science Park Road, San Diego, California 92121, Attention: Investor Relations,
telephone: (858) 552-9400.
* * * * *
================================================================================
TITAN ANNOUNCES ACCRETIVE ACQUISITION OF AVERSTAR
FOR APPROXIMATELY $140 MILLION IN COMMON STOCK
- ACQUISITION ADDS TO TITAN'S DIVERSIFIED TECHNOLOGY PORTFOLIO -
================================================================================
SAN DIEGO, CA -- MARCH 27, 2000 -- The Titan Corporation (NYSE: TTN), a
leading-edge technology company that builds technology-based businesses, today
announced that it has entered into a definitive agreement to acquire AverStar,
Inc., a private company headquartered in Burlington, Massachusetts. The
acquisition, which will be accounted for as a pooling of interests and tax-free
exchange of common stock, has an equity value of approximately $140 million,
plus the assumption of approximately $65 million in debt, and is expected to be
accretive to Titan's earnings.
AverStar provides information technology solutions focused on the areas of
information assurance, information operations and network and information
security. AverStar's broad and highly diversified customer base includes
civilian government agencies, the Department of Defense, and commercial
companies.
AverStar, with an annual revenue run rate of approximately $230 million, is
organized similar to Titan, with its commercial information technology and
government information technology businesses each being stand alone business
units. After completion of the AverStar transaction, which is expected to close
by the end of the second quarter of 2000, The Titan Corporation will have
annualized revenues in excess of $1 billion, a backlog in excess of $2 billion,
and approximately 7,100 employees worldwide.
"AverStar is a technology-rich company with a large intellectual property base,
deep information technology expertise, and entrepreneurial employees," said Gene
W. Ray, Chairman, President and CEO of Titan. "AverStar brings to Titan a wealth
of technology that is highly complementary, and when coupled with our internal
capabilities, enhances our strategy of creating, building and launching
technology-based businesses. The acquisition also furthers our goal of building
our government information technology business into a $1 billion business over
the next few years. The acquisition of AverStar, which is accretive to the Titan
Corporation's earnings per share, will allow us to continue to meet our earnings
objectives while also continuing to increase our investments in building
commercial based businesses."
<PAGE>
Under the terms of the definitive agreement, AverStar will receive a total
equity value of approximately $140 million, if Titan's share price is between
$44.00 and $56.00 per share at the time of closing. If Titan's share price is
between $39.60 and $44.00, the equity value will decrease ratably from $140
million to approximately $126 million. At a Titan share price of less than
$39.60, AverStar has the right to terminate the definitive agreement subject to
a Titan option to assure a minimum equity value of approximately $126 million.
If Titan's share price is between $56.00 and $61.60, the equity value will
increase ratably from $140 million to approximately $154 million. At a Titan
share price of more than $61.60, Titan has the right to terminate the definitive
agreement subject to an AverStar option to agree to receive a maximum equity
value of approximately $154 million. The transaction has been approved by the
board of directors of both companies and is subject to regulatory approval.
Credit Suisse First Boston is acting as exclusive financial advisor to Titan on
this transaction.
"We believe both companies will benefit greatly from our combination with
Titan," said Michael Alexander, Chairman and CEO of AverStar. "AverStar's
employees have a strong entrepreneurial spirit and a history over the last 30
years of adapting to new market opportunities. Titan's commercial operations and
technology incubator affords the combined companies the opportunity to
capitalize on their technology expertise. I am confident that AverStar's 1,700
employees will enjoy being a part of the Titan team."
Separately, Titan also reported that its previously announced acquisition of
Pulse Engineering closed during the previous week.
Headquartered in San Diego, California, The Titan Corporation is a leading-edge
technology company that creates, builds and launches technology-based
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. Prior to this
acquisition, the Titan Corporation has 5,400 employees, annualized sales of
approximately $825 million and total backlog in excess of $1.6 billion.
Conference call at 8:00 a.m. (Pacific) to discuss this release will be broadcast
on the Internet.
"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
(858) 552-9400 or [email protected]
MEDIA CONTACT:
Wil Williams, VP Corporate Communications
(858) 552-9724 or [email protected]
