Heidrick & Struggles, a global executive search and consulting firm, experienced a 19.6% rise in its stock price after announcing a $1.3 billion plan to go private. The offer of $59 per share is significantly higher than its previous closing price and is a crucial part of the company’s transformation strategy. This acquisition highlights the strong interest of private equity in companies focused on human capital. Over the past year, HSII, which has a Zacks Rank #2 (Buy), has grown by 58.5%, outperforming its peers, who saw an 18.7% increase.

Expanding Company Offerings

HSII is broadening its services by adding digital transformation and talent analytics to stay competitive. The company expects earnings to grow by 17.6% next year, with the Zacks Consensus Estimate for current-year earnings rising by 2.4% in the last 60 days. The market quickly acknowledged the acquisition’s value, with the stock closing close to the deal price despite mixed results in the broader market. The acquisition should finalize in the first half of 2026, pending regulatory approvals. Once complete, the company will be delisted from Nasdaq and will operate privately. Following the announcement of HSII’s go-private deal, there’s a clear merger arbitrage opportunity. With the acquisition price set at $59 and the stock currently around $58.25, there’s a small gap to take advantage of. We might consider selling cash-secured puts at a strike price close to $57.50, expiring in early 2026, to earn premium by betting the deal will go through.

Sector Implications

This buyout indicates strong confidence in the human capital sector, especially as private equity reports having a record $2.5 trillion available to invest. Competitors like Korn Ferry (KFY) and ManpowerGroup (MAN) may now be viewed as undervalued and possible targets for similar acquisitions. We should explore buying medium-term call options on these companies to speculate on further industry consolidation. Even though the Nasdaq and S&P 500 have reached new highs, concerns about a potential government shutdown are causing investor unease. The CBOE Volatility Index (VIX) rose above 18 last week, up from the lows seen over the summer of 2025. Buying protective puts on broad market ETFs like SPY is a smart move to hedge against a possible downturn in the coming weeks. The same fears of a shutdown, along with expectations of interest rate cuts, are driving a strong rally in precious metals. Gold is nearing the $4,000 mark, continuing a trend that started when the Federal Reserve shifted to a more accommodating stance in late 2024. We believe this momentum will persist, and buying call spreads on gold ETFs like GLD offers a capital-efficient way to gain from further upside. Create your live VT Markets account and start trading now.

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