Toll Group sells global business unit

Australian private equity firm, Allegro Funds, has agreed to acquire the Toll Global Express business.

Allegro has obtained $500 million (AUD) in funding to complete the separation and transformation of the business. Allegro believes that Toll Global Express’ people and its assets can deliver strong growth in the future. This business has a crucial role to play as an enabler for e-commerce which will underpin the economic recovery of Australia and New Zealand post Covid-19.

Allegro has appointed Adrian Loader, one of Allegro’s founding partners, as Chair of the new company. Allegro has an outstanding track record as Australia’s most awarded turnaround fund.

“The business has faced challenges, but we are excited by the opportunity ahead and have great confidence that Toll Global Express can realise its full potential,” said Loader.

“Allegro is committed to a transformation program, underpinned by $500 million [AUD] in funding to support and grow the business.

“The business has high quality assets, is number one or two in its core market segments and will be supported by strong local management,” he said.

Toll Chairman, John Mullen, said the agreement is consistent with Toll’s strategy to focus on its Asia-Pacific logistics strengths and fits with Allegro’s investment thesis of investing in Australian and New Zealand companies to realise their potential.

“We have spent the last three years transforming and strengthening Global Express and today the business is a market leader,” said Mullen.

“I am confident that under Allegro’s ownership, Global Express will have the support and focus it needs to reach its full potential.

“The divestment is consistent with Toll’s strategy to focus on being a pre-eminent Asia-Pacific logistics provider through its core businesses in contract logistics and freight forwarding.”

Loader thanked Toll and Japan Post for its stewardship of and recent investment in the business and said Allegro looked forward to working with Toll Group in the future.

Allegro said its plan to continue to transform Toll Global Express would begin by listening to the company’s customers, employees and partners.

“We are acutely aware that the business plays a vitally important role for its stakeholders across both sides of the Tasman, and on both sides of Bass Strait,” said Loader.

“We are confident that with strong local focused management the business can achieve operational and financial improvement at the same time as enhancing the experience for customers.”

In the weeks until completion, Allegro will focus on satisfying the remaining sale conditions, and then meeting key stakeholders to understand their insights on the business. After completion, Toll Global Express will be renamed.

The transaction is fully funded through a combination of Allegro funds and debt backed by Commonwealth Bank, Scottish Pacific and Gordon Brothers.

The transaction is targeted for completion on 30 June 2021.