Stallworth's company sells for $69 million

Madison Research, one of Huntsville's top technology companies, has been bought by a California firm, Wireless Facilities Inc., for $69 million.

According to a Madison Research spokesman, no major changes are expected with the acquisition as far as employment. But CEO and President John Stallworth, the 54-year-old NFL Hall of Famer, will be retiring from the company when the deal closes over the next 30 to 45 days.

"He'll be here through the official close, then he will be stepping down,'' Larry Lewis, vice president of corporate development for MRC, said Wednesday.

MRC is headquartered in Huntsville and employs about 375 people in offices located in 15 states. The company specializes in providing engineering and information technology services to government and commercial clients.

MRC had revenues of $62 million in 2005. Earlier this year, it opened a new 10,000-square-foot manufacturing facility in Huntsville.

"For 20 years the team at MRC has worked with a wide range of government customers to provide innovative IT and technical solutions,'' Stallworth said in a statement. "We are delighted to be joining WFI, one of the leading network communications and technical solutions companies, to further expand our work within the federal government. Our customers and employees will significantly benefit from the enhanced capabilities of this combination.''

Stallworth formed Madison Research in 1986 along with his wife, Flo, and partner, Sam Hazelrig, a year before his retirement from the National Football League. Stallworth, a graduate of Alabama A&M University, was inducted into the NFL Hall of Fame in 2001. He won four Super Bowl rings with the Pittsburgh Steelers.

Stallworth couldn't be reached for comment Wednesday. Lewis said Stallworth would be working more closely with his scholarship foundation.

Government push

Headquartered in San Diego, WFI is an independent provider of systems engineering, network services and technical outsourcing for the world's largest wireless carriers, enterprise customers and for government agencies.

It has about 2,200 employees worldwide. Michael Baehr, vice president of corporate communications with WFI, said Wednesday that the company isn't expecting to make a lot of changes at MRC. He said it was too early to say if more workers might be shifted to Huntsville.

The Madison Research name will be dropped as the company becomes a division of WFI when the deal closes, Baehr said.

Seth Potter, a New York-based stock analyst who covers WFI for Punk Ziegel & Co., said the deal follows the company's push into the government sector.

Potter said government business accounted for about 24 percent of the company's business in the last quarter.

Potter said the wireless business tends to focus on shorter term deals and challenges companies to have new deals in the pipeline. The longer term nature of the government business provides more predictability, he said.

But the deal is largely being financed with debt, Potter said. Wireless companies have limited ability to predict their future results, so they tend to shy away from significant leveraging of their business, Potter said.

"The management team, prior to coming to WFI, was in the government business with Titan (Corp.)," Potter said. "I've not been a big fan of what's going on there. But it'll ultimately have to do what type of business this is going to lead to."

"WFI's acquisition of Madison Research is extremely significant and strategic for the company," said Eric DeMarco, president and CEO of WFI. "A key strategy for WFI is to grow our government business as quickly and selectively as practical to add continued stability and more predictable long-term revenue for the overall business. MRC is a particularly ideal fit for WFI because of its very deep relationships across a number of military agencies and because of its existing, high-value contract vehicles.''

WFI, traded on the Nasdaq under the symbol WFII, closed at $2.09 Wednesday, down 19 cents.