TOLL Group parent company Japan Post has agreed to sell its Global Express business to private equity company Allegro Funds.
The sale is subject to regulatory approvals and other conditions, but the deal is expected to close on 30 June.
Toll Express includes courier and express parcel services, in addition to intermodal, shipping and palletised operations.
Day-to-day operations are to remain unchanged in the meantime, with customers continuing to work with their existing Toll teams throughout the separation of Global Express from Toll Group.
Allegro Funds said it had obtained $500 million in funding to complete the purchase and “transformation” of the business.
It said the 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 appointed Adrian Loader, one of the Allegro’s founding partners, as chair of the new company.
“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,” Mr Loader said.
“Allegro is committed to a transformation program, underpinned by $500 million 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.”
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,” Mr Loader 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 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.
“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,” Mr Mullen said.
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.
“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,” he said.
Mr Knudsen said the changing operating environment – including shifting supply chain dynamics, the rise of e-commerce, 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.
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,” he 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 new operating entity.