What should I check before buying a crane rental company?
Check four things: the cranes and their maintenance and inspection records, whether the operators will stay, who holds the customer relationships, and how the work splits between bare rental and operated rental. A crane company is its fleet, its crews and its repeat customers, and each can leave with the owner.
A crane rental company looks simple from the road: a yard of machines and a phone that rings. Behind it sit maintenance files, a crew that knows the equipment, and customers who call one person by name. Walking the yard shows the equipment. The questions below help show whether the business can keep running after the owner leaves.
Start with the cranes and their paper
Ask for a list of every unit with its age, hours and ownership. Then ask for the maintenance and inspection history of each one, and have a qualified crane mechanic or inspector look at the machines you care about. Gaps in the records are a question to put to the seller, not proof of a problem. Also confirm who owns each crane, since financed or leased units carry other people’s claims. Our page on how to assess equipment condition covers the walk-through.
Find out how much is bare and how much is operated
Some revenue comes from renting a crane alone, and some from supplying the crane with an operator and rigging crew. The two behave differently. Operated work depends on people and relationships. Bare rental depends on the fleet and on price. Ask the seller to separate the two in the books, and ask which customers use which service.
Look at the crew and the customers
Ask how long the operators and riggers have stayed, who supervises them, and whether any of them plan to leave when the owner does. Then ask who holds each major customer relationship. If a handful of contractors supply most of the work, or if the owner personally wins the jobs, plan for a transition period and talk to those customers where the seller allows it. Your lawyer can tell you how the contracts transfer.
Things to put on your checklist
- A complete fleet list with ownership and any liens, checked through your lawyer.
- Maintenance and inspection records for each crane, and the date of the last work.
- Operator and rigger tenure, and who supervises them.
- The customer list, with how much work each contractor gives the company.
- Open claims, incident history and insurance records, confirmed with the insurer.
Related reading
15 pages on the same subject, grouped by topic.
Due diligence
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Financing
Valuation
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentEquipment valuation: How to do it
- 03Business Development Bank of CanadaGovernmentMajor pitfalls to avoid when negotiating a purchase agreement
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