Santa seeks buyer for Christmas, Inc. as he plans for retirement

Scott Bushkie

Guest Columnist

November 29, 2023

After centuries of leading Christmas, Inc., Santa Claus is looking to sell the business and enjoy retirement life in Florida.

He has hired an investment bank and has been putting plans in motion to find the right buyer and maximize the company’s sale price. 

Sources say Santa has been planning his exit strategy for years, working with an M&A advisor to understand the value of his business and how to optimize operations for a successful sale on his terms.

Here’s what Santa’s been doing to plan his exit:  

Confidential representation
After decades of running the Naughty & Nice List, Santa puts retirement plans in motion by hiring an M&A advisor to discreetly seek multiple buyers.

Santa knows that confidentiality is extremely important.  

If Santa doesn’t plan properly for communicating the transition, he risks current customers defecting or employees jumping ship too soon if rumors leak out haphazardly.

Perhaps Santa’s delivery reindeer would apply for jobs at Amazon, rather than stick around to work for a new, unknown owner.  

Or perhaps Walmart would convince kids to send their Christmas wish lists to their company HQ instead, convincing kids that Christmas Inc. might falter in the transition.

By using an advisor who knows how to market the business confidentially, Santa can better avoid these risks.  

Seeking an outside buyer
Santa knows he needs to find an outside buyer rather than handing their reins to his son Charlie.

They’ve had a frank talk about it, and Charlie just doesn’t have the same passion for the job and admits he’s not interested in the cost and pressure of taking over Christmas Inc.  

Charlie’s the head toy designer and he’d be much happier staying in that role.

As a key company leader, though, there may be an opportunity for Charlie to gain a minority equity share in the transition.

They decide to talk to their M&A advisor about finding a buyer open to this option. 

Developing the management team
A little more than a year ago, Santa’s workshop empowered several elf managers with improving company metrics, specifically increasing the number of children who believe in him. His team developed a plan and made some solid wins, boosting their value proposition before a sale.  

Santa understands the importance of showing that Christmas Inc. can thrive without his oversight – that’s why he’s investing in his team, giving them more autonomy, and developing their leadership skills.

Diversification
Santa and his team have also been exploring ways to reduce dependence on kids during the Christmas season.

They’ve been building more interest in gifts for grown-ups and forging additional gift supplier relationships to tap new celebrations like birthdays.

Diversifying beyond your core customer base makes the business more resilient and valuable.

Reduce working capital
In the year leading up to sale preparations, Santa’s also been working to optimize his working capital at Christmas Inc.

He negotiated improved payment terms with toy suppliers to extend accounts payable, and he accelerated the collection of accounts receivable from his Christmas gift customers. 

Santa also tightened up the inventory management system at the North Pole workshops.

By enhancing demand forecasting, the elves could reduce excess raw material and finished goods inventory not needed to meet near-term demand.

Taken together, these initiatives allowed Santa to reduce working capital requirements and unnecessary excess cash tied up in the business, and that’ll mean more value in Santa’s pocket when the sale is complete. 

Document operations
Santa and the elves have been working to standardize business processes and document key operation and manufacturing workflows.

Demonstrating the business doesn’t rely solely on institutional knowledge can increase buyer confidence.

Consulting other financial advisors
Now that Santa has obtained a well-researched, independent estimate of Christmas Inc.’s value from his M&A advisor, he can make a better, more well-informed decision whether to go to market or HO-HO-hold until it makes financial sense and engage other advisors to optimize next steps.  

Santa plans to meet with a tax specialist to discuss the tax implications of various deal options, such as seller financing, leasing the facility, or structuring the deal as a partial sale over multiple tax years.

He will also consult a financial planner about gifting some ownership stake to his children ahead of the sale.

According to inside sources, Santa seeks to capitalize on the strong brand recognition of Christmas, Inc., seeking buyers who will continue its global expansion under new leadership.

By starting the sale process early, Santa can evaluate interested buyers and transact from a position of strength.

This exit will allow Santa to hand over the reins with Christmas, Inc. well-positioned for continued success.