Titan Corporation

Titan Corporation was a United States defense and telecommunications contractor headquartered in San Diego, California. The company developed and supplied information, communications, intelligence, language, engineering, and technical-support services for U.S. government and military customers. Although its origins were in telecommunications and defense electronics, Titan expanded into a broad government-services business that included intelligence support, information technology, military translation, exercise planning, consequence-management operations, and specialized technical systems. Gene W. Ray founded the business in 1981 after spending 11 years as an executive at Science Applications International Corporation. The company initially operated as Titan Systems, Inc. In May 1985, it adopted the Titan Corporation name following a stock merger with Electronic Memories & Magnetics valued at approximately $26 million. Titan became a public company in 1987. During the late 1980s and 1990s, it pursued acquisitions and entered adjacent technology markets, including medical-product sterilization and electronic pasteurization and irradiation systems for ground beef. These activities reflected an effort to commercialize technologies developed for defense and government customers while reducing dependence on defense procurement cycles. Titan increasingly emphasized federal contracting as defense and intelligence requirements changed. It supplied communications and information systems and performed technical work for agencies including the U.S. Department of Defense and Department of Homeland Security. Its acquisition strategy accelerated after 2000, when the company completed numerous transactions to add capabilities and pursue commercial and government opportunities. In 1998, for example, Titan announced plans to acquire Visicom Inc. and Delfin Systems Inc. for approximately $47.5 million in stock to expand its computer business. After the September 11 attacks, Titan entered or expanded in language and translation services. It acquired BTG Inc. of Fairfax, Virginia, a company with an existing military contract, and benefited from increased U.S. demand for linguists during the wars associated with the post-9/11 counterterrorism effort. In 2003, Titan received a $112.1 million U.S. military translation-services contract. At the time, the company reported approximately 12,000 employees worldwide and annual revenue near $2 billion, although these figures relate to the period before its acquisition and are not current operating figures. Titan also held major systems and planning contracts. Its work included support for the Airborne Warning and Control System, U.S. Navy war-game design, and planning, analysis, exercises, and information technology for chemical, biological, radiological, nuclear, and high-yield explosive consequence management. In February 2006, after the acquisition, the former Titan organization announced a five-year Department of Homeland Security multiple-award contract with a ceiling of $350 million. The company became involved in two major corporate transactions during its final years. A proposed acquisition by Lockheed Martin ended in June 2004 after Titan did not satisfy closing conditions connected with a Department of Justice investigation into alleged Foreign Corrupt Practices Act violations. In March 2005, Titan pleaded guilty to charges arising from an illegal $2 million payment connected with the 2001 reelection campaign of Benin president Mathieu Kérékou and agreed to pay $28.5 million in criminal and civil penalties. L-3 Communications completed its acquisition of Titan on June 3, 2005, for $2.65 billion. The acquired operations continued temporarily under the Titan Group name within L-3. In early 2007, L-3 directed divisions using that name to discontinue the Titan branding and adopt new names. Titan therefore ceased to exist as an independent corporate brand, although many of its capabilities and…

Titan Corporation began in 1981 as Titan Systems, Inc., founded by Gene W. Ray in San Diego. Ray had previously been an executive at Science Applications International Corporation. In May 1985, Titan Systems adopted the Titan Corporation name after merging with Electronic Memories & Magnetics in a stock transaction valued at about $26 million. Titan went public in 1987 and initially concentrated on telecommunications, defense electronics, and government-oriented technology. The company broadened its portfolio during the late 1980s and 1990s. It pursued acquisitions to add engineering, computer, communications, and specialized industrial capabilities. In 1992 it entered medical-product sterilization, and in 1999 it added electronic pasteurization and irradiation systems for ground beef. These businesses were part of a diversification effort intended to apply defense-derived technologies in commercial markets. In 1998, Titan announced proposed stock acquisitions of Visicom Inc. and Delfin Systems Inc. to enlarge its computer business. Titan’s core identity increasingly became that of a federal contractor. It developed information and communications products and supplied solutions and services to intelligence agencies and government departments, including the Department of Homeland Security. After reductions in the growth of defense spending, the company used acquisitions to pursue new commercial and government opportunities. It completed a particularly active series of transactions from 2000 until its sale several years later. The post-September 11 security environment accelerated Titan’s move into language services. The company acquired BTG Inc., based in Fairfax, Virginia. BTG had held a military contract dating to 1999, and demand for linguists increased as U.S. military and counterterrorism operations expanded. Titan received a $112.1 million military translation contract in 2003, which its annual-report information identified as approximately six percent of that year’s revenue. Titan simultaneously maintained a substantial defense-technology and government-services portfolio. It supported development work associated with the Airborne Warning and Control System, received an $18 million U.S. Navy contract for war-game design, and won a potential $163.9 million contract from the U.S. Army Space and Missile Defense Command for U.S. Northern Command’s Joint Task Force Civil Support. The latter work covered planning, analysis, exercises, and information technology for chemical, biological, radiological, nuclear, and high-yield explosive consequence management. In February 2006, the former Titan organization announced a $350 million, five-year Department of Homeland Security multiple-award contract. Titan’s final independent years were overshadowed by legal and ethical controversies. Titan and CACI employees were associated with the Abu Ghraib prisoner-abuse investigations. In May 2004, Titan employee Adel Nakhla was dismissed after acknowledging involvement in restraining prisoners in abusive circumstances described in the Taguba Report. Separately, the proposed Lockheed Martin acquisition collapsed on June 26, 2004, after Titan failed to satisfy conditions concerning the Justice Department’s Foreign Corrupt Practices Act investigation. On March 2, 2005, Titan pleaded guilty to illegal payments totaling $2 million associated with the 2001 reelection campaign of Benin president Mathieu Kérékou and agreed to pay $28.5 million in penalties, described in the reference material as the largest FCPA penalty at that time. L-3 Communications acquired Titan on June 3, 2005, for $2.65 billion. The former company continued for a period as the Titan Group within L-3. By early 2007, L-3 instructed the divisions using the Titan name to discontinue the moniker and operate under new names. Titan consequently became a defunct independent brand, with parts of its workforce, contracts, and technical capabilities absorbed into L-3’s successor organization.

1. 2007Titan name retired within L-3

   L-3 directed former Titan divisions to discontinue use of the Titan branding.

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2. 2006Homeland Security contract announced

   Titan announced a five-year DHS multiple-award contract with a potential value of $350 million.

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3. 2005Acquisition by L-3 Communications

   L-3 Communications completed its $2.65 billion acquisition of Titan on June 3.

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4. 2004Lockheed Martin transaction collapses

   Lockheed Martin terminated its proposed acquisition after Titan did not meet closing conditions related to the FCPA investigation.

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5. 2003Military translation contract

   Titan received a $112.1 million U.S. military contract for translation services.

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6. 1999Entry into electronic food-treatment systems

   Titan diversified into electronic pasteurization and irradiation systems for ground beef.

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7. 1998Computer-business acquisition plans announced

   Titan announced stock-based plans to acquire Visicom Inc. and Delfin Systems Inc. to expand its computer business.

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8. 1992Entry into medical sterilization

   Titan diversified into medical-product sterilization technology.

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9. 1987Titan becomes publicly traded

   The company went public and continued expanding its government and defense-technology activities.

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10. 1985Company adopts the Titan Corporation name

    Titan Systems merged with Electronic Memories & Magnetics in a stock transaction and adopted the Titan Corporation name.

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11. 1981Titan Systems is founded

    Gene W. Ray founded Titan Systems, Inc. in San Diego as a telecommunications and defense-oriented technology company.

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A diversified U.S. government and defense contractor combining communications technology, intelligence support, information systems, engineering, language services, and specialized technical solutions for military and federal customers.

• Defense communications and information systemsDefense technology

  Titan supplied communications, information-technology, and intelligence-support products and services to U.S. military and federal customers. The portfolio supported government communications and technical operations rather than a mass-market consumer brand.

• Military translation and linguist servicesGovernment services

  Following the acquisition of BTG Inc., Titan provided translation and language-support services for military and intelligence-related customers. This business expanded sharply as demand for linguists grew during post-9/11 military operations.

• CBRNE consequence-management supportDefense and emergency-management services2005

  Titan performed planning, analysis, exercise, and information-technology work for operations involving chemical, biological, radiological, nuclear, and high-yield explosive incidents. The work supported U.S. Northern Command and the Joint Task Force Civil Support.

• Medical sterilization systemsIndustrial technology1992

  Titan entered medical-product sterilization in 1992 as part of its effort to commercialize specialized technologies outside its traditional defense contracting base.

• Electronic pasteurization and irradiation systemsFood-processing technology1999

  The company entered electronic pasteurization and irradiation systems for ground beef in 1999, extending its technology portfolio into food-processing applications.

• 2007Retire the Titan Group nameStrategy

  L-3 had continued using the Titan Group identity for some acquired divisions after completing the acquisition.

  What changed. L-3 internally directed the divisions using the Titan name to discontinue the moniker and adopt new names.

  Aftermath. The Titan brand disappeared as an operating identity, marking the end of the independent company’s visible corporate continuity.

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• 2005Resolve the Benin bribery case through a guilty pleaOther

  U.S. authorities pursued allegations that Titan had made an illegal payment connected with a political campaign in Benin and had filed false tax returns.

  What changed. Titan pleaded guilty and agreed to pay $28.5 million in fines and civil penalties.

  Aftermath. The case became one of the company’s defining corporate controversies and complicated its proposed Lockheed Martin transaction and future ownership.

  Criminal fines and civil penalties. $28.5 million (2005)

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• 2005Sell Titan to L-3 CommunicationsM&A

  After the failed Lockheed Martin transaction and an active period of acquisition-led expansion, Titan accepted an acquisition by L-3 Communications.

  What changed. L-3 Communications completed the acquisition on June 3, 2005, for $2.65 billion.

  Aftermath. Titan operated as the Titan Group within L-3 until the Titan name was retired from the divisions in early 2007.

  Acquisition value. $2.65 billion (June 3, 2005)

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• 2004Terminate the proposed Lockheed Martin mergerM&A

  Lockheed Martin and Titan had pursued a merger while the U.S. Department of Justice was examining alleged Foreign Corrupt Practices Act violations.

  What changed. The transaction was terminated after Titan failed to obtain the required Justice Department resolution or enter into a plea agreement by the specified deadline.

  Aftermath. Titan remained independent temporarily, but the legal controversy contributed to the company’s weakened strategic position before its later sale to L-3 Communications.

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• 2006SkyWay-related allegationsControversy

  Titan had briefly partnered with SkyWay Communications and held stock in companies connected with SkyWay. After a SkyWay-linked aircraft was seized with cocaine, media reports raised questions about Titan’s former relationship and an employee’s alleged connections. The material does not establish criminal wrongdoing by Titan.

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• 2005Foreign Corrupt Practices Act violation in BeninControversy

  Titan pleaded guilty to illegally providing $2 million connected with the 2001 reelection campaign of Benin president Mathieu Kérékou and agreed to pay $28.5 million in criminal fines and civil penalties. The case also involved false tax-return filings.

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• 2004Abu Ghraib contractor-abuse controversyControversy

  Titan employees were among contractors implicated in investigations of prisoner abuse at Abu Ghraib. The U.S. Army inquiry attributed contractor involvement to 36 percent of proven incidents and identified six employees as individually culpable, according to the cited reference. Titan employee Adel Nakhla was terminated after acknowledging that he had restrained prisoners in abusive circumstances.

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• 2007L-3 retires Titan branding

  L-3 directed divisions operating under the Titan Group name to stop using the Titan name and adopt replacement identities.

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• 2006Titan announces Department of Homeland Security contract

  Titan announced a five-year, multiple-award Department of Homeland Security contract with a stated potential value of $350 million for task-based support.

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• 2005L-3 Communications completes Titan acquisition

  L-3 Communications acquired Titan for $2.65 billion, after which Titan operated as the Titan Group within L-3.

  M&A
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• 2003Titan receives U.S. military translation-services contract

  Titan was awarded a $112.1 million contract to provide translation services for the U.S. military, highlighting the expansion of its language-services business after the September 11 attacks.

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1. Titan Corporation