Allegro wins battle to buy Toll Global Express
Private Equity Firm Earns $ 500 Million For Transformation Task
The Toll Global Express lawsuit appears to have ended, with the Toll group agreeing to sell the transaction to private equity fund manager Allegro Funds.
Allegro says it has raised $ 500 million in funding to complete the separation and transformation of the business, with the deal expected to close on June 30.
Other national and international private equity players would have been interested in the company, as well as logistics players, but the sheer size of an operation that generated $ 3.2 billion in revenue seems to have tilted the balance to the first.
Toll Chairman John Mullen notes the deal is in line with Toll’s strategy to focus on its logistics strengths in Asia-Pacific and fits Allegro’s ‘investment thesis’ of investing in companies. Australia and New Zealand to realize their potential.
“We have spent the past three years transforming and strengthening Global Express and today the company is a market leader,” says Mullen.
“I am confident that under Allegro ownership, Global Express will have the support and focus it needs to reach its full potential.
“The divestment is in line with Toll’s strategy to focus on being a leading logistics provider in Asia-Pacific through its core businesses in contract logistics and freight forwarding.
The Global Express business provides express parcel, freight delivery and domestic transit services in Australia, as well as transportation and contract logistics services in New Zealand.
Learn more about Toll’s progress in his difficult financial struggle, here
Allegro appointed Adrian Loader, one of the founding partners of Allegro, to chair “the new company”.
“The company has faced challenges, but we are excited about the opportunity that lies ahead and are confident that Toll Global Express can realize its full potential,” says Loader.
“Allegro has embarked on a transformation program, backed by funding of $ 500 million to support and grow the business.
“The company has high quality assets, is number one or two in its core market segments and will be supported by strong local management.”
Allegro said his plan to continue transforming Toll Global Express would begin with “listening to the company’s customers, employees and partners.”
“We are fully aware that the company plays an extremely important role for its stakeholders on both sides of the Tasman and on both sides of the Bass Strait,” says Loader.
“We are convinced that with strong local management, the company can achieve operational and financial improvements while improving the customer experience.”
In the weeks following completion, Allegro will focus on meeting the remaining terms of sale and then meet with key stakeholders to understand their ideas about the business.
Toll and Allegro say they are committed to making the transition a smooth one for customers and that service standards are met throughout the transition.
When completed, Toll Global Express will be renamed.
“Under the terms of the sale, Allegro will operate the Global Express business under the Toll brand for a two-year transition period,” says Toll.
“Toll’s global logistics and global transportation business is unaffected by today’s announcement.”
Allegro says the transaction is fully funded by a combination of its own funds and debt backed by the Commonwealth Bank, Scottish Pacific and Gordon Brothers.