Buying a dump truck and aggregate hauling company in Canada

Someone evaluating a hauling company is buying a stream of dispatched loads as well as trucks, and the trucks only earn if they are called. The questions to answer are whether the calls repeat, whether the fleet fits the work around it and whether the record is clean enough for the company to keep bidding. This guide covers what to look for, what a seller may not volunteer, and what a buyer has to qualify for personally.

What a good one looks like

Look for customers who call the same dispatcher season after season, a mix of tri-axles, tandems and transfer trucks that matches the local jobs, and drivers who have stayed. Ask for a view of work booked beyond the current season. If there is no forward book, ask what next season’s work depends on. Ask who actually holds each relationship, because if it is the owner personally, the question for the seller is what introductions they will make and for how long they will stay involved. The glossary entry on key person risk explains why this matters to price. Then ask what the drivers think of the sale.

What the seller may not volunteer

Ask how much revenue came from one pit, one quarry or one paving contractor, and what would happen to the business if that account moved. Ask what the oldest trucks are really costing in repairs and downtime, and when the last major rebuild happened. The Ontario government’s CVOR page lists setting up a regular vehicle maintenance schedule and keeping vehicle maintenance and repair records among an operator’s responsibilities, so for an Ontario carrier ask to see those records for every unit. Ask whether any hauling involved demolition or excavated material, and whether any of it was classified as waste under provincial rules. Ask whether the company has ever been refused or lost a tender or prequalification. Ask for the answers in writing, then check them against the documents in diligence. Where a seller’s answer and the paperwork disagree, that gap is the thing to understand before any price is agreed.

What you must personally qualify for

Transport Canada says provincial and territorial regulations govern the operation of the commercial truck industry, apart from the rules it sets for federally regulated (extra-provincial) carriers that carry goods across a provincial or international boundary. So the answer depends on the province, and on whether the company crosses one. Transport Canada describes the National Safety Code as a code of minimum performance standards applying to all persons responsible for the safe operation of commercial vehicles. In Ontario, the Ontario government says that if you operate a commercial vehicle in the province you must have a valid CVOR certificate, subject to the exceptions it lists (such as trucks plated in another Canadian province or territory, which need that jurisdiction’s safety certificate), and must tell the Ministry immediately about changes such as corporate officers. Ask the registering body what a change of ownership requires of you, and whether you or someone you employ must hold a particular qualification.

The structure of the deal matters

Treadstone Law notes that in a share purchase the contracts, leases and licences stay in the corporation’s name, and the buyer inherits everything, including hidden liabilities. In an asset purchase, its comparison table says contract and licence transfers need consents. Ask the regulator and the tender owner whether the safety registration and any prequalification follow the trucks. If they are what you are buying, that may point towards buying the entity, which raises the stakes of diligence. Your lawyer will help you weigh this; do not decide it from a template. Ask also whether any trucks are leased, whether customer or tender contracts can be assigned without consent, and whether a change of control triggers a notice to a regulator, a lender or a customer. Each answer feeds the structure, so gather them before the offer rather than after.

Who else is looking

Ask the seller who else has looked at the business, and why they did not proceed. If other haulers, contractors or owner-operators have looked, ask what each was interested in; the answer can show what others saw in it. The existing guide on buying a trucking business covers the general carrier questions.

• Revenue by customer for several seasons, and what is already booked beyond this one
• Repair, downtime and rebuild history for each truck, not only the fleet list
• Whether any hauled material was classified as waste, and what registrations that required
• What the registering body requires of you, personally, when ownership or officers change
• Whether the safety record and any tender prequalification stay with the entity you are buying