What should I check before buying a roof truss manufacturer?
Check which builders and lumber dealers bring the work and how concentrated it is, the backlog, how quotes are set when lumber costs move, who does the design and holds the software licences, the condition of the saws, presses and yard, and the delivery trucks and crane. Leave engineering sign-off questions to your lawyer.
A truss plant looks simple from the road: lumber in, frames out. Behind that sit design work, a handful of builder relationships and quotes written weeks before the lumber is bought. Start with the checks in our answer on buying a manufacturer with fixed assets, then add the ones below that belong to trusses.
Builders, dealers and backlog
Ask who the plant sells to, directly and through lumber dealers, and how much of the work depends on a few of them. Ask how long these accounts have been with the plant. Review the backlog and how firm each job is. Builders can pause, so a full order book is less certain than it looks.
Quotes and lumber costs
Lumber costs can move between the quote and the delivery. Ask how the plant writes quotes, how long they stay open, and whether it has ever filled a job at a loss because costs rose. Ask what the seller does when costs change after a job is booked. Read a few recent quotes beside the invoices for the lumber.
Design, software and people
Find out who designs the trusses, whether the design software is licensed to the company or to a person, and whether the licence moves to a buyer. Ask who holds the key knowledge on the shop floor. If the owner does the design work, you need a plan for who will do it after the sale.
Equipment and delivery
Have someone who knows the trade look at the saws, presses, tables and yard. Ask for service records and what is leased. Check the delivery trucks and crane for age and condition. Engineering sign-off and product standards are for your lawyer and the plant’s engineer to explain, not for the seller alone.
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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 CanadaGovernmentWhat are the steps to buying a business?
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