Buying a landscaping and grounds maintenance company in Canada

A landscaping company can look simple from the road: trucks, mowers, a crew and a list of properties. The harder questions are about what sits behind that list. Is the revenue contracted or merely habitual? Do customers deal with the company or with one person? Who is licensed to do the regulated work, and will that person stay? A buyer evaluating a company in this sector is trying to separate what transfers from what leaves with the seller. This guide is for someone weighing a specific company. It covers what a good one looks like, what a seller may not mention, and what you must qualify for personally. It does not tell you whether to proceed, and a price needs a valuator and an accountant. Treat each section as a question to put to the seller and then to check against documents, because a seller’s answer is where the investigation starts and not where it ends. Write down what you are told, who said it and what document would confirm it, so that you can return to each point during due diligence with a specific request instead of a general worry.

What a good one looks like

Look for written maintenance contracts with defined terms and renewal dates, held by the company, with customers who can name more than one contact. Look for crew leads who have been with the company through several seasons, a fleet with a documented replacement history, and work beyond the growing season. BDC’s advice to sellers describes the same traits from the other side: documented standard operating procedures, maintained equipment, addressed customer concentration, and a business that does not rely on the owner’s presence. BDC says documented procedures make a company’s operations more easily transferrable to a new owner.

What the seller may not volunteer

Gaps are not always hidden on purpose, but some only come to light if you ask. Ask which contracts were renewed on a signed agreement and which on a verbal one. Ask which residential accounts follow a particular crew lead. Ask what the owner personally does each week, including estimating, customer calls and equipment repairs. Ask how many trucks and mowers are due for replacement, and whether any maintenance has been put off to make the year look better. BDC says a seller will not get full value if equipment is not maintained, which is a reason to check the condition yourself. Have a mechanic or an equipment dealer inspect the major units, and compare what the seller says about hours, repairs and age with the service records. Ask whether any equipment is leased or financed, since that affects what you actually acquire.

What you must qualify for yourself

Check which requirements attach to people and registrations rather than to the business. If the company applies pesticides or fertilizers, ask the provincial environment ministry whether that work needs a licence and what the buyer or staff must hold before the work can continue. In Ontario, the province’s CVOR page says that if you operate a commercial vehicle in Ontario, you must have a valid CVOR certificate, and it lists which trucks and other vehicles need one and which do not, so ask whether the seller’s vehicles fall under it and how the certificate is handled on a change of ownership. Transport Canada says regulations governing commercial vehicles, drivers and motor carriers are based on the Canadian National Safety Code standards. In Quebec, the Régie du bâtiment du Québec has a page on work that requires a licence, so check whether the company’s work is covered.

The workers’ compensation account follows the deal

Whether the buyer inherits the seller’s workers’ compensation obligations depends on the province and the deal structure. In Ontario, the WSIB says it may hold the purchaser liable for amounts owed by the vendor up to the date of sale if the purchaser does not get a valid purchase certificate when buying assets. Ask your lawyer which rules apply where the company operates, and ask whether the clearance can be made a condition of closing. Also ask about insurance: the current policy, the claims history and whether the insurer will cover you on the same terms after the change of ownership. Landscaping involves vehicles, equipment and work on other people’s property, so ask the insurer what would change for a new owner. For the searches and records a buyer should then request, see the due diligence guide for this sub-sector.

• Ask for every maintenance contract and confirm which are written, for what term, and held by the company
• Find out which customers and crew leads the owner personally manages
• Request the fleet schedule and an independent look at the major units before you rely on it
• Confirm with the provincial bodies what licences and registrations you must hold and who holds the current ones
• Ask the workers’ compensation board for the clearance process in the province where the crews work