Toll Group to sell its Global Express business

Japan Post-owned Australian transport and logistics business Toll Group has agreed to sell its Global Express business – one of its three main divisions – to Australian private equity company Allegro Funds, in order to focus on “its core businesses in contract logistics and freight forwarding”.

Completion of the sale is subject to regulatory approvals and other customary closing conditions, with completion targeted for 30 June.

Toll said day-to-day operations “will be unchanged in the meantime, with customers continuing to work with their existing Toll teams throughout the separation of Global Express from Toll Group”. Toll’s Global Logistics and Global Forwarding businesses are not impacted by the change, the company said

Toll Group Chairman, John Mullen, said the sale marked an “exciting opportunity to build a profitable, sustainable company for the long term, by re-orienting around its key strengths and competitive advantage”.

Mullen said the agreement was in line with Toll’s strategy to focus on its Asia-Pacific logistics strengths – and with Allegro’s investment thesis of investing in Australian and New Zealand companies to realise their potential.

Core businesses

He commented: “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. As an international business with a strong Australian heritage and significant Asian operations, the sale affords us the opportunity to invest in growing our operations across the Asia region while continuing to build on our strong competitive position in Australia – where it all began.”

Toll Group Managing Director, Thomas Knudsen, said the team would seek to create an even more compelling offering for customers by drawing on the “strength, scale and expertise we’ve built over 125 years through new and innovative solutions that help us grow with our customers in what is a very different world”. He added: “In undertaking the sale, we’ll retain the scale and expertise to manage complex supply chains across diverse markets in our key markets in Asia-Pacific.”

Mr Knudsen said that the changing operating environment – including shifting supply chain dynamics, the rise of eCommerce, and the continued rise of Asia as an economic powerhouse – presented exciting opportunities for Toll’s customers and employees.

“We’ll draw on our core capabilities, global reach and sector expertise – as well as our trusted relationships with customers, governments and the broader supply chain industry – to forge a new and exciting future for the business,” he said.

Melbourne-headquartered Toll said the agreement with Allegro Funds marked “a significant chapter” in the history of the organisation, describing Allegro Funds as “a successful Australian private equity company with a reputation for building great businesses, helping them to grow and become more profitable”.

President of the Global Express division, Alan Beacham, said the sale of Global Express will “further build upon the business’ positive trajectory to delivering operational improvements and serving its customers. The sale is testament to how far we’ve come as a business, and it marks a new and exciting chapter for our people and for the customers we serve.”

Toll said further details relating to Toll’s proposed structure and operating model going forward will be provided on completion of the sale process and as part of the transition to a new operating entity.

Adrian Loader, one of Allegro’s founding partners, said the team looks forward to working with management and all stakeholders to drive the business forward.

“We are excited about the future potential for Global Express and are committing $500 million in funding to continue the business’ transformation and support its growth over the long term,” said Loader. 

Toll Group and Allegro “are committed to ensuring that the transition is seamless for customers and that service standards are upheld throughout the transition”, Toll stressed. 

Under the terms of the sale, Allegro will operate the Global Express business under the Toll brand for a two-year transitional period.