Buyout sees new owners promise long-term vision for milk and chemicals transporter
McColl’s Transport is under new management with a familiar face at the helm, with plans to expand the company’s fleet and assets for a long-term future.
Former McColl’s CEO Simon Thornton has returned to head up the company after leading an investment group to acquire the company for $52.5 million in May from private equity firm KKR and fund manager Allegro.
The investment group, which involves some 25 different individual shareholders, was dubbed “Friesian” after the black and white dairy cow – an analogy Thornton told ATN was no accident.
“A Hereford is a beef calf – you only have it so you can send it to market. But the ownership club is called Friesian, it is a dairy cow, it is here for a long time – and that is the way we are thinking about it,” he says.
“McColl’s has been a good company all the way through, it just needs people to start caring for it for the long term… this is the kind of company that needs to be owned by dairy farmers rather than beef farmers.”
Founded in Geelong in 1952 as a milk trucking company, McColl’s is Australia’s largest independent carrier of dairy, food and consumer and industrial chemicals, with a fleet of more than 195 prime movers and 544 tankers.
After the McColl family sold out of the business in 2005, the company was first passed to ABN AMRO Capital, before being bought by private equity firm KKR in 2012 after a joint private equity venture with Scott’s Refrigerated fell apart, and Scott’s was bought back from administrators.
The new board will include Thornton, corporate lawyer James MacDonald and corporate advisor Mark Mentha, of KordaMentha fame.
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Back in town: McColl’s Transport boss Simon Thornton
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Thornton tells ATN he was embracing the opportunity to consider the company’s future with a longer timeframe in mind, potentially 20 years and over.
“Because of short term ownership, both in this company and others in our various competing industries, people have avoided investing in specialised equipment and specialised infrastructure,” he says.
“If we just go and do that we think we can get ourselves the inside running on a whole lot of work.”
In the past six months, the company has purchased 49 new prime movers, 10 road trains and 13 tankers with plans for a step-up in fleet and infrastructure investment over the next three years to meet customer demand – with potentially more to come.
That said, Thornton says the company still sees itself as more of a tanker company than a general transport firm.
“We see ourselves as being in a position to make some investments in infrastructure as well as specialised fleet to give us a long term competitive space in the market,” he says.
“It is an exciting time and I am very happy to be back. McColl’s is a great company and it has got great customers.”