The Titan Corp. announced that the Securities and Exchange Commission is investigating possible illegal payments by the company to international consultants.
The defense technology company and Lockheed Martin, which have agreed to merge, said representatives from the two companies recently initiated meetings with the Department of Justice and the SEC to advise those agencies of an internal review relating to the payment agreements.
Lockheed said it is not aware of any unlawful payments by Titan and intends to cooperate fully with the government’s investigation. Titan said it intends to cooperate fully with Lockheed Martin in accordance with the terms of the parties’ merger agreement. Titan added that its board of directors has established a board committee to oversee an internal review.
Lockheed Martin said it requested that Titan provide access to all relevant information related to its relationships with international consultants. Lockheed intends to review that information in advance of a stockholders’ meeting scheduled for March 16, when the merger is expected to be voted upon. Wall Street traders, however, now anticipate a delay in the deal’s closing, according to press reports.
Titan spokesman Wil Williams told Reuters that the probe “focuses on a very small internal area that was dealing with our radio operation. I want to underscore that we are not aware of any problem.” Added Williams, “we fully expect the merger to continue on schedule.”
Lockheed Martin said it plans to independently review Titan’s payments to international consultants to assess whether all conditions to the closing of the proposed merger will be satisfied. “We want to move expeditiously through this review and move on to closing the transaction,” Lockheed spokesman Tom Jurkowsky told Reuters. “We’re focused on concluding the review by that date.”
Last September, according to Reuters, Lockheed offered to acquire Titan for $1.8 billion in cash and stock and to assume $580 million in debt.