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Executive Search Firm Cancels IPO of Net Unit

Heidrick & Struggles International, Inc. has withdrawn the initial public offering its online subsidiary, LeadersOnline.com.

LeadersOnline.com had the misfortune of filing to sell its initial public offering with the Securities and Exchange Commission on April 10 -- the day that the Nasdaq composite index recorded one of its largest point losses ever and widely recogized as the beginning of the end for Internet stock euphoria.

One analyst explained the reason for the IPO withdrawal was two-fold. "The markets [lacked] interest in small Internet companies which are not profitable," wrote Meg Saegebarth, analyst at Goldman Sachs. But also Heidrick believes that Internet recruiting will have a dramatic positive impact on the core executive search business.

In a statement released Thursday evening, Heidrick & Struggles said, in charting a new course for LeadersOnline.com, it would "tighten the linkages" between the online operations and its core business. But the company failed to detail how the online contingency search operations would be incorporated in the retainer-based business model.

Heidrick plans to take a $17 million charge in connection with the cancelled IPO.