DEFM14A: Heidrick & Struggles to Go Private in $59.00 Cash Merger

Heidrick & Struggles International, Inc. stockholders are invited to a special meeting on December 5, 2025, to vote on a $59.00 per share all-cash merger agreement with affiliates of Advent International and Corvex PE Advisors.

Summary

• A special meeting of stockholders will be held virtually on December 5, 2025, at 10:00 a.m. Eastern Time, to vote on the proposed merger.
• Stockholders will consider and vote on adopting the Merger Agreement, a non-binding advisory vote on executive compensation related to the merger, and a proposal to adjourn the meeting if necessary.
• Heron Merger Sub, Inc., a wholly-owned subsidiary of Heron BidCo, LLC (an affiliate of Advent International, L.P. and Corvex PE Advisors LP), will merge with and into Heidrick & Struggles International, Inc. (Heidrick).
• Heidrick will continue as the surviving corporation and a wholly-owned subsidiary of Parent.
• Each outstanding share of Heidrick's common stock will be converted into the right to receive $59.00 in cash, without interest and subject to applicable withholding taxes.
• The Company's Board of Directors unanimously determined the merger is advisable, fair, and in the best interests of Heidrick and its stockholders, recommending a vote FOR all three proposals.
• Approval of the Merger Agreement requires the affirmative vote of stockholders holding a majority of the outstanding shares of common stock (10,397,471 shares as of October 29, 2025).
• Heidrick's directors and executive officers, who collectively own approximately 1.03% of outstanding shares, intend to vote in favor of all proposals.
• The merger is targeted for completion by the first quarter of 2026.
• The total funds needed for the merger are approximately $1,350,000,000, to be funded through committed debt and equity financing.

Sentiment

Score: 8

Explanation: The unanimous board recommendation, substantial premium over recent trading prices, all-cash consideration, and high certainty of closing due to committed financing and regulatory clearances (German clearance already received) indicate a very favorable outcome for current shareholders.

Positives

• The all-cash consideration of $59.00 per share provides certainty and immediate liquidity to stockholders, eliminating long-term business and execution risks.
• The $59.00 per share represents a significant premium of 17.8%, 22.0%, and 25.7% over the volume-weighted average price for the 30, 60, and 90 trading day periods, respectively, ending October 3, 2025.
• The Company Board believes the merger consideration compares favorably to the potential long-term value of Heidrick as a stand-alone public company, considering associated risks.
• An extensive strategic alternative process was conducted, involving outreach to 13 financial sponsors, leading to competitive bids and ultimately the current offer.
• The merger is not subject to any financing condition, and Parent has secured committed equity financing of $1,350,000,000 and debt financing commitments of $700,000,000, increasing closing certainty.
• The terms of the Merger Agreement were the product of arms-length negotiations, providing a high degree of certainty that the merger will close in a timely manner.
• Appraisal rights are available to stockholders who properly exercise their statutory rights under Delaware law.
• Regulatory clearance for the transaction has already been received from the German Federal Cartel Office on October 31, 2025.

Negatives

• Following the merger, Heidrick will no longer be a stand-alone publicly traded company, and existing stockholders will not participate in any future earnings or growth.
• There is a risk of disruptions to Heidrick's business, including current plans, operations, and relationships with clients, suppliers, business partners, and employees, due to the merger announcement.
• Potential for employee attrition and diversion of management attention from ongoing business operations during the pendency of the merger.
• If the merger is not completed, Heidrick will incur significant transaction expenses and opportunity costs, and the trading price of its common stock may decline significantly.
• Restrictions on Heidrick's business operations prior to closing without Parent's prior written consent may delay or prevent the company from pursuing certain business opportunities.
• Any gains arising from the receipt of the merger consideration will generally be taxable to Heidrick stockholders for U.S. federal income tax purposes.
• There is a risk of litigation arising from Heidrick stockholders in respect of the Merger Agreement or the transactions contemplated by the Merger.

Risks

• The risk that the transactions may not be completed in a timely manner or at all, which may adversely affect Heidrick's business and the price of its common stock.
• Failure to satisfy the conditions to the consummation of the transactions, including stockholder approval and receipt of regulatory approvals from various governmental entities.
• The occurrence of any event, change, or other circumstance that could give rise to the termination of the Merger Agreement.
• Heidrick may be required to pay Parent a termination fee of $38,900,000 under certain specified circumstances.
• The effect of the announcement or pendency of the transactions on Heidrick's business relationships, operating results, and ability to attract, integrate, develop, manage, retain, and motivate qualified consultants and senior leaders.
• Risks related to diverting management's attention from Heidrick's ongoing business operations.
• The outcome of any legal proceedings that may be instituted against Heidrick related to the Merger Agreement or the transactions.
• Heidrick's ability to fill or obtain new executive search assignments, which could impact demand for services and affect results of operations or financial conditions.
• Unexpected costs, charges, or expenses resulting from the proposed transactions.
• The impact of adverse macroeconomic or labor market conditions, including inflation, volatile interest rates, and geopolitical instability, on demand for services.
• Risks caused by delays in upturns or downturns being reflected in Heidrick's financial position and results of operations.
• Risks that the benefits of the transactions are not realized when and as expected.
• Uncertainty as to the timing of completion of the proposed transactions.
• Failure to prevent cybersecurity incidents or the perception that confidential information is not secure.
• The high degree of competition Heidrick faces from other participants in its industry, particularly given the relatively low barriers to entry and fragmented nature of the search industry.
• Execution risks implicit in achieving the financial forecasts, including the risk that strategic initiatives may not be successful in driving demand, incur greater expenses, result in suboptimal margins, or cause a failure to attract/retain qualified consultants.

Future Outlook

If the merger is completed, Heidrick will become a private, wholly-owned subsidiary of Parent, its common stock will be delisted from Nasdaq and deregistered from the SEC, and it will no longer file periodic reports. Management anticipates operating the business in a manner similar to its current operations. If the merger is not completed, Heidrick will remain an independent public company, subject to existing risks and uncertainties, and its stock price may decline significantly. The company targets the first quarter of 2026 for merger completion.

Management Comments

• Thomas L. Monahan III, Chief Executive Officer, indicated that Heidrick was not for sale but that the Company Board would consider all proposals to create value for Heidrick stockholders.
• The Company Board unanimously determined that the Merger Agreement, the Merger and the other transactions contemplated thereby are advisable, fair to and in the best interests of Heidrick and its stockholders.
• The Company Board unanimously recommends, on behalf of Heidrick, that you vote (i) FOR the Merger Agreement Proposal; (ii) FOR the non-binding, advisory Compensation Proposal; and (iii) FOR the Adjournment Proposal.

Industry Context

The financial advisor, BofA Securities, noted that there was no natural strategic buyer for Heidrick, and that interest was more likely to come from the financial sponsor community due to significant interest and activity in high-quality professional services businesses. This suggests a broader trend of private equity firms targeting human capital leadership advisory companies.

Comparison to Industry Standards

• BofA Securities reviewed 14 publicly traded companies in the staffing services industry, including Korn Ferry (primary comparable), diversified staffing companies (e.g., Randstad N.V., The Adecco Group AG), and vertically focused staffing companies (e.g., Robert Half International Inc., AMN Healthcare Services, Inc.).
• The analysis compared enterprise values as multiples of estimated Adjusted EBITDA for calendar years 2025 and 2026, and per share equity values as multiples of estimated Adjusted EPS for the same periods.
• Heidrick's NTM Adjusted EBITDA multiple as of October 3, 2025, was observed to be lower than Korn Ferry and other selected publicly traded companies in both diversified and vertical staffing businesses.
• BofA Securities also reviewed 19 selected precedent transactions in the staffing services industry, comparing transaction values as multiples of the target company's Adjusted EBITDA for the last twelve months.
• The Merger Consideration of $59.00 per share falls within the implied per share equity value reference ranges derived from various analyses: $41.00 $52.75 (2026E Adj. EBITDA), $48.00 $53.75 (2026E Adj. EPS), $48.75 $65.25 (EV/LTM Adjusted EBITDA), and $52.50 $67.25 (Discounted Cash Flow).

Management Changes

Corporate Governance

Legal Proceedings

• Risk of litigation arising from Heidrick stockholders in respect of the Merger Agreement or the transactions contemplated by the Merger.
• The Company and Parent have agreed to use best efforts to defend all actions by or before a governmental entity challenging the Merger Agreement or the consummation of the Merger.

Related Party Transactions

• Named executive officers are considering co-investing a significant portion (and in the case of Mr. Monahan, all) of their after-tax proceeds from the merger into the securities of the Surviving Corporation (or a parent thereof), subject to further discussions with the Consortium.
• Other than the Merger Agreement, Equity Commitment Letter, Limited Guarantee, Confidentiality Agreements, and ordinary course executive search engagements, there are no other material contracts or arrangements between Parent/Merger Sub/Equity Investors/Guarantors and Heidrick's management, board, or beneficial owners of shares related to the company or the merger.

Stakeholder Impact

• Shareholders: Will receive $59.00 cash per share, providing immediate liquidity and a premium over recent trading prices, but will lose future participation in Heidrick's growth as a public company. Appraisal rights are available.
• Employees: Compensation and benefits (base salary, cash incentives, severance, health/welfare) will be maintained on no less favorable terms for at least 18 months post-merger. Full credit for prior service for eligibility, vesting, and benefit accruals under Parent Plans. A Post-Closing Equity Plan (15%-17% of fully diluted equity) is planned for key talent.
• Management/Executive Officers: Will receive cash for their shares and equity awards (RSUs/PSUs at maximum performance). Potential for significant severance benefits upon qualifying termination. Potential for excise tax reimbursement (up to $25M aggregate). Opportunities for co-investment in the Surviving Corporation and participation in a go-forward management incentive plan.
• Clients/Suppliers/Business Partners: There is a risk of disruption to relationships due to the merger announcement and pendency.

Next Steps

• Heidrick stockholders will vote on the Merger Agreement Proposal, Compensation Proposal, and Adjournment Proposal at the Special Meeting on December 5, 2025.
• The merger's completion is contingent upon stockholder approval and remaining regulatory clearances, such as from the Australian Competition and Consumer Commission.
• If approved, the merger is targeted for completion by the first quarter of 2026.
• Upon completion, Heidrick's common stock will be delisted from Nasdaq and deregistered under the Exchange Act.
• Parent and the Company will cooperate to establish procedures with the Paying Agent and DTC for the payment of merger consideration.
• Parent will ensure the Surviving Corporation maintains certain compensation and benefits for Company Employees for at least 18 months following the Effective Time.
• Parent will cause the Surviving Corporation to maintain directors and officers liability insurance and fiduciary liability insurance for six years post-merger.

Key Dates

Recommendation

The filing details a definitive all-cash merger agreement at $59.00 per share, which the board unanimously recommends. For existing shareholders, the most straightforward action is to hold their shares to receive the cash consideration upon the merger's completion, which is expected by Q1 2026. Given the significant premium over recent trading prices and high certainty of closing due to committed financing and regulatory progress, this strategy allows shareholders to realize the full value of the offer.

Keywords

Heidrick & Struggles, HSII, Merger, Acquisition, Private Equity, Advent International, Corvex PE Advisors, Executive Search, Human Capital Advisory, Take-Private, SEC Filing, Proxy Statement, Stockholder Vote, Cash Consideration, Corporate Governance