Struggling Australian logistics operator Toll Group is set to sell its express division to Australian private equity firm Allegro Funds for AU $ 10million, leaving the country’s largest 3PL with transit operations and contract logistics.

Although neither Toll nor Allegro have confirmed the scale of the deal, Loadstar Premium revealed that Toll Group owner Japan Post, which bought the company for AU $ 6.5 billion (US $ 5.1 billion) in 2015 and was forced to write off AU $ 4.7 billion two years later, revealed net proceeds of $ 7.8 million from the operation.

Toll Group Express (TGE) accounted for around 41% of the group’s revenue last year, amounting to AU $ 3.2 billion, but found a much more difficult profit and hit the group’s balance sheet – the group’s net debt increased by A $ 5.7 billion in FY2020 compared to A $ 2.7 billion the year before, although it is not clear how much of this is due to the division express, which managed to record a small operating profit in the last quarter of the year.

However, Allegro, who appointed fund founder Adrian Loader as the new chairman of TGE, said he had secured AU $ 500 million in funds he intended to invest in the 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,” said 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 backed by strong local management, ”he added.

Toll Group said the deal was due to be completed by the end of June and MD Thomas Knudson said he would now focus on its freight forwarding and contract logistics operations.

“We will retain the scale and expertise to manage complex supply chains in various markets in our key markets in Asia-Pacific,” he said, noting that supply chain dynamics, the rise of electronic commerce and the continued economic development of Asia continued to present opportunities for Toll.

“We will leverage our core capabilities, global reach and industry expertise – along with our trusted relationships with customers, governments and the broader supply chain sector – to forge a new and exciting future for the company, ”he said.