$700m 'war chest' to spend on acquisitions: Little

Toll armed with $700 million war chest to spend on acquisitions here and overseas, Paul Little says

October 19, 2009

Toll Holdings is armed with a $700 million war chest to spend on acquisitions here and across Europe, North America and Asia, Managing Director Paul Little has revealed.

Speaking to ABC1's Inside Business program, Little says while Toll is not yet up with the big players of the global forwarding industry there is every possibility that could change in the next decade.

But it will come through small steps, he says, not giant leaps.

"I think you’ll see we are ambitious to grow that business [global forwarding]. It currently has turnovers wound about a billion dollars," Little says.

"We believe it needs to be scalable up round the $3 billion mark in terms of annual turnover and that would put us pretty close to being at the top of global forwarding service providers.

"At the moment we are sub-scale into the US, we’re sub-scale into Europe, and I think we can, over the next year or two, generate the right sort of volume we need to become more competitive."

The Toll chief, who has overseen the company’s rapid growth over the last decade, believes good management has left the business with more than enough money to spare, making expansion a logical initiative.

"Look, we’ve said that we have a war chest, if you like, inside Toll based on current surplus cash and undrawn facilities with the banks," he says.

"We could quite easily be expanding that sort of number. It’s more likely however that you’ll see two or three smaller acquisitions than one big one.

"The global heavyweights are very strong in global forwarding in terms of their performance, their size, their influence on global forwarding generally.

"We believe we’ve got to crawl up the ladder, not take a big leap, and part of trying to mitigate the risk associated with moving into this new environment for Toll is the belief that small bites, bite-size chinks are going to be far more digestible for us."

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