A private equity firm is considering acquiring Toy Co., a major traditional toy manufacturer. The case explores market sizing, industry trends, and strategic considerations for the potential acquisition. Key points include:

• US toy market estimated at $14.4 billion annually
• Shifting market shares among toy categories over the past decade
• Action figures and outdoor toys gaining popularity, while dolls and puzzles decline
• Recommendations for Toy Co. to adapt to consumer trends
• Considerations for the PE firm in deciding whether to acquire, including industry growth, competition from electronics, and potential for repositioning Toy Co.’s offerings

The case tests candidate’s ability to analyze market data, identify trends, and make strategic recommendations in the context of a private equity acquisition.