Did everybody see what happened with Staffing 360 Solutions (STAF) today? If not, here's the Q&D version - Jackson Investment Group is interested in acquiring the company, sending STAF shares up about 46% when all was said and done. Thing is, Staffing 360 Solutions is easily worth more than the offer, and could very likely counter-offer at an even much better price (and Jackson would still be getting a bargain). We thought that might catch your attention. It certainly caught ours. OK, here's the whole scoop. Jackson Investment Group, or JIG, is a private investment outfit with a name that might ring a bell for some of you who've been following the Staffing 360 story closely. JIG was the company that supplied $7.4 million worth of funding for STAF back in January, and has been working with the organization for a little while now. In fact, reports say Jackson already owns 34% of the company. Now it appears they're taking their interest up a notch or two... or ten. Per reports that surfaced this morning with Reuters and other sources, JIG has delivered a letter to Staffing 360 inviting the company to discuss a complete buyout. The pending offer is $1.10 per share, spurring today's sizeable rally. It's important to note that Staffing 360 Solutions hasn't taken the offer; they'd want to talk to their shareholders anyway. And, it's equally important to note the offer from Jackson Investment Group isn't a binding offer; JIG could walk away whenever it wants to. Indeed, for the record, Staffing 360 Solutions hasn't even acknowledged that it's received such a letter. It's unlikely this is the kind of rumor that would surface out of the blue though, and this kind of informational disclosure is characteristic of Jackson. Point being, it's probably true. Honestly, we can't say we're terribly surprised. We'd actually be surprised if an acquisition offer didn't materialize sooner than later. See, STAF has been strangely undervalued for too long now. It's generated $183 million worth of revenue over the course of the past twelve months, only has about $24 million in debt, is inching very close to GAAP profitability, yet sports a market cap of only $10.2 million after today's 55% gain. Why wouldn't a suitor want in? We would be a little shocked,, though, if most STAF shareholders were willing to settle for $1.10 per share. A counter-offer, we suspect, could be in the cards if the company is truly interested in selling itself. The question is, how much? It's a question that's been answered before, not so much by us, but by other analytical firms. Greenridge Global Equity Research reiterated its $3.00 target on STAF in January, and SeeThruEquity said it's worth $5.65. Those were future-looking targets, mind you, meaning STAF may not necessarily be worth those values just yet, but based on its trajectory will justify those values in the foreseeable future. On the other hand, the offer of $1.10 right now still doesn't seem to fully reflect the value Staffing 360 Solutions would have to any buyer right now, or later. That's why we'd expect a counter-offer. Jackson may not pay the $5.65 SeeThruEquity targeted, but it's likely willing to pay considerably more than $1.10. Now let's see at what price (if any) Staffing 360 Solutions is interested. This is the cat-and-mouse game you often see with M&A negotiations. In a broader sense, this is a sign that M&A mania is trickling down into the small cap space, as the number of buyout-worthy large and mid-cap names dwindles. More specifically, it bodes well for the potential buyout of some of our other Featured Stocks. If we had to name a couple, we'd specifically suggest SPYR (SPYR) and Patriot One Technologies (PTOTF) as the top buyout candidates. The $64,000 follow-up question: Why those two? The answer is, they both fit the mold, so to speak, and both have highly marketable products on the market (or about to be on the market). We won't rehash the whole SPYR story, simply because you already know it. We will reiterate something printed in the Wall Street Journal last year though...." A record year in videogame deal making is turning attention to smaller mobile-game developers now that most bigger targets have been gobbled up." That record year for the video game market, by the way, was $30 billion worth of acquisitions. The next big hot button in video games is going to be eSports, and SPYR is building a game from the ground up to become the next major eSports battleground. As for Patriot One Technologies, we didn't get a chance to tell you this in the newsletter yet, but earlier this week another potential customer asked for a test run of the weapons detection equipment on its premises. Specifically, the Westgate Las Vegas Resort & Casino has asked Patriot One to install some CMR1000 weapons-detection units at its hotel, and integrate them with its existing security framework. In case you've forgotten, the CMR1000 ('CMR' is an short for Cognitive Microwave Radar) is nothing less than incredible. It works not unlike a X-ray machine at an airport, but also not unlike a more conventional metal detector you might find at an airport or at the entryway to a building. In all regards though, it's better than both. By using high-frequency microwaves that are harmless to humans, the CMR1000 can even pinpoint exactly what kind of metallic weapon it is... a semi-automatic pistol versus a revolver, or a machete versus a pocket knife. This capability overcomes the key shortcoming of most threat-detection apparatus in use today. For those of you keeping score, that's the third demonstration installation that's been requested of Patriot One Technologies in less than three weeks, and the things technically aren't even commercially available yet. That won't happen for a couple of months. Yet, the word is clearly getting out. In light of the fact that the CMR1000 took years to develop and is pretty well patented, it could be years before a rival could come up with anything close to the weapons-detection tool. The world doesn't have years to ramp up the war on terror though, as the tragic events in London this week reminded us. It's going to be easier and faster for a security technology company to just acquire a powerful new technology. If not, well, that's ok too. PTOTF looks plenty promising on its own. Speaking of promising stocks, we'll go ahead and let you know we've got another small cap trading idea coming your way Monday morning, right around the open. This one's from the resources space, which has been a good sector for us of late. This pick may also be an acquisition target sooner or later, though in many ways it's one we'd kind of like to see remain on its own so the story can fully cultivate. Of course, should it get bought it, we're not going to complain - both would be wins. In any case, check your inbox early on Monday morning. This new Featured Stock will be arriving then. Until then, have a great weekend.