Toll Group is selling their Global Express business to private equity fund manager Allegro Funds.
Allegro has obtained $500 million in funding to complete the separation and transformation of the business, which it believes will play a crucial role in the future of e-commerce and the economic recovery of Australia after COVID-19.
The Global Express business provides express parcel, freight delivery and domestic forwarding services in Australia, and transport and contract logistics services in New Zealand.
John Mullen, Chairman at Toll said the agreement was consistent with Toll’s strategy to focus on its Asia-Pacific logistics strengths and Allegro’s continued investment in Australian companies.
“We have spent the last three years transforming and strengthening Global Express and today the business is a market leader. I am confident that under Allegro’s ownership, Global Express will have the support and focus it needs to reach its full potential,” he said.
“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.”
Adrian Loader, Founding Partner at Allegro and chair of the soon-to-be new company said the team was looking 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,” he said.
“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.
“Toll Global Express has high quality assets, is number one or two in its core market segments and will be supported by strong local management.”
Adrian said the first order of business to transform the new acquisition would be to listen to the company’s existing 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,” he said.
“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.”
Toll Group and Allegro are committed to ensuring the transition is seamless for customers and that service standards are upheld throughout the transition.
Under the terms of the sale, Allegro will operate the Global Express business under the Toll brand for a two-year transitional period, when it will then be renamed.
The sale is subject to regulatory approvals and other customary closing conditions with the transaction targeted for completion by 30 June.