Buying a pool installation and service company in Canada

Someone evaluating a pool company is buying a seasonal operation, and one risk is that the quality of what they see depends on when they look. In winter the books show the end of one year and the promise of the next; in summer the crews are visible but the full year is not. This guide is for the buyer weighing whether a particular company is a good one. It covers what a strong company looks like in its records, what you must qualify for yourself, what a seller may not raise, and how staff and subcontractors affect the purchase. It does not recommend buying or walking away from any company.

What to look for on paper

Look for a link between the two halves: how many installation customers go on to service, how dense the service book is, and whether the crews can build the backlog in the time available. Ask for several seasons of installation and service results reported separately, and a customer-level list showing which service accounts began as installs. Know which half you are buying before you negotiate.

What you must qualify for yourself

Check which qualifications the business needs and whether you hold them. In Ontario, the Electrical Safety Authority states that only electrical contractors it licenses may do electrical work for hire, and that a Licensed Electrical Contractor must be a Master Electrician or have at least one Master Electrician working for it at all times. If the company does its own electrical work on pool equipment, find out whether the licence belongs to the company or to a person, and whether it can stay in place after the sale. If the company subcontracts that work, ask who the subcontractors are and whether they will continue.

Provincial differences

Where the company operates changes what you need to ask. Technical Safety BC states that a Field Safety Representative must be named on every electrical permit application in British Columbia, so a buyer there should ask who that person is for the company’s permits and whether they work for the seller. Technical Safety BC also says the FSR listed for a project must be accurate, and that FSRs should only be listed on permits for projects they are actively managing. For a company working in Quebec, ask the relevant provincial regulator what licensing applies to pool work. Municipal permit and fencing rules may also apply, so ask which municipalities the company has built in and whether any permits remain open.

What the seller may not volunteer

Ask to see the weakest season as well as the best. Ask directly about deposits held on jobs not yet built, and whether the backlog schedule reflects the crews the company really has. Ask about any claim for a failed shell or liner, including those settled quietly, and whether any warranty promises remain open. Ask how many service customers have left in recent seasons and why. Ask what share of new business came from the owner’s own relationships, since that is the part that may not transfer. None of these questions accuses the seller; they are the ones a careful buyer needs answered.

Staff, subcontractors and employment

Service technicians and installation crews may know the customers and the routes. In British Columbia, the Employment Standards Branch explains that when all or part of a business is disposed of, employment is deemed continuous and uninterrupted for the purposes of the Act, so the purchaser must treat the employees as though their employment is continuous and undisturbed by the sale. The Branch also explains that if a trustee in bankruptcy sells the business and the employees continue their employment, their employment is deemed not to be continuous for the purposes of the Act. Other provinces have their own rules, so ask your lawyer what applies where the staff work. Either way, ask who the key people are, how long each has been with the company, and whether any are planning to leave around the sale.

Planning the purchase

Decide which part of the company you want, installation capacity or the service book, before you negotiate. BDC says a financing structure may combine your own investment, a business loan and seller financing, so plan that early. BDC also says that, before applying for financing, you and the seller must agree on a purchase price, and it asks for a clear transaction structure, such as an asset or share purchase.

• Who holds the electrical and gas qualifications, and whether they stay with the company
• Several seasons of installation and service results reported separately
• The backlog schedule, deposits held and crew capacity to build it
• Claims and warranty history for shells and liners
• Key staff, their tenure and any plans to leave