Titan Corp.'s shareholders overwhelmingly approved the acquisition of the company by defense giant Lockheed Martin Corp. yesterday, clearing one hurdle in the $2.2 billion deal that has been delayed by investigations into whether Titan consultants bribed foreign officials.
About 98 percent of voting shareholders favored the acquisition. Titan shareholders would receive $20 in cash per share if the deal is finalized, a slight premium from yesterday's close of $19.05 per share.
"We are very pleased that our stockholders have approved the proposed merger by such an overwhelming margin," Gene W. Ray, Titan's chairman and chief executive, said in a statement. "We look forward to completing the proposed merger after all conditions have been satisfied."
San Diego-based Titan's next challenge is resolving a Justice Department investigation into the bribery charges by June 25, when the acquisition is scheduled to close. Lockheed could walk away from the deal if the criminal investigation is not resolved by then.
Titan could face other penalties. The Securities and Exchange Commission staff has recommended that civil charges be brought against the company over the allegations it paid foreign bribes, Titan said last week. The company has set aside $3 million to pay possible fines resulting from the separate probes.
Bethesda-based Lockheed declined to comment on the shareholder vote or the SEC staff recommendation.
Lockheed pursued Titan for its growing government information technology expertise. But the company's largest contract is to provide linguists for the Army Intelligence and Security Command. That contract has come under scrutiny after an Army report alleged that at least one Titan employee working at the Abu Ghraib prison near Baghdad may have been present during abuses of Iraqi prisoners.