What should I check before buying a paving company?

A paving company looks simple from the road: trucks, a crew and a finished surface. Behind it sit expensive machines, a supply chain for hot mix, a short working season and a handful of people who know how every bid was priced. A buyer who checks only the financial statements will miss most of that. Walk through the operation itself, and use a due diligence checklist to keep the questions in order.

The fleet and who owns it

Ask for a list of every truck, paver, roller and trailer, with age, hours and service records. Then ask who owns each one. Some may be leased, financed or held by a lender as security, and some may belong to the owner personally rather than the company. Have the equipment looked at by someone who knows paving machinery. Ask what major repairs are coming, because a screed or a roller drum that needs replacing is a real cost that lands on you.

Asphalt supply and plant access

Most paving companies buy hot mix from a plant, and some own or share one. Ask which plants the company uses, whether there is a standing arrangement, and what happens to pricing and priority when the plant is busy. If the company owns a plant, the checks multiply: permits, stockpiles, environmental history and the condition of the plant itself. A change of ownership may also change how a supplier treats the account, so speak to the supplier if the seller allows it.

Backlog, customers and people

Ask what work is already booked and who the customers are. Repeat commercial accounts, property managers and municipalities are different kinds of work, and each has its own way of paying. Find out who prices the jobs and who runs the crews. If the estimator or the foreman is the owner, ask how the business keeps running when the owner leaves, and whether those people will stay.

Warranty work and bonding

• Ask for a list of jobs with open warranty or call-back work, and who handled the complaints.
• Ask whether the company carries bonding and what the surety would need to see from a new owner.
• Ask for the insurance history and any claims.
• Ask whether any job is in dispute or unpaid.