Buying a tree care and arborist company in Canada

A tree care company puts a crew at height with equipment that can hurt people. That shapes what you are really buying. You are not only taking over trucks and a customer list. You are taking responsibility for a crew working at height, for equipment that can hurt people, and for the reputation that brings in calls. The questions below are for someone still evaluating, before any letter of intent. They start with you and your own qualifications, so you can see early whether anything there would hold a purchase up.

What you must be able to do yourself

Ask what the business needs in order to operate and which of those items are held by the owner personally, not by the company. Some credentials may belong to an individual rather than the company, so ask who on the crew holds each one, whether it would transfer, and whether they will stay, and what each would need in order to be persuaded to remain. Ask which permits, registrations and insurance policies would have to be reissued in your name or your company’s. If you plan to run the crews yourself, check what training and certification you would need before you could supervise the work. If you plan to hire someone to do it, ask what that person would cost and whether you could find one, because the answer affects what you can afford to pay.

What a sound company looks like on paper

Look for evidence that work repeats: contract paperwork with dates, a customer list showing who came back, and records that tie revenue to named jobs. Look for a crew with several qualified people rather than one climber everyone depends on. Look for equipment with maintenance records and a replacement plan. None of these proves the business is good, but their absence is a reason to ask harder questions. Ask also how jobs are priced and tracked, whether estimates are compared with actual results, and whether the owner can show which kinds of work earn the most for the hours and equipment they use. Compare what you are told with the statements and tax returns, since the Business Development Bank of Canada (BDC) asks for those when you apply for a purchase loan.

What a seller may not volunteer

Ask directly about property-damage and injury claims, including ones that were settled or are still open, and about near misses that never became claims. Ask whether the largest contracts are tied to the owner’s relationship with a particular person. Ask what the equipment replacement list looks like and when the next large purchase falls due. Ask how much of the last few years’ income came from storm response, and what the company would earn in a year with no major weather. Put each question in writing and keep the written answers, so they can be tied into the purchase agreement later. If an answer changes between conversations, ask which version is correct and why. Ask the seller how long they would stay on after closing to introduce you to customers and to the crew, and what they would want in return.

Safety record and vehicle registrations

Ontario says that if you operate a commercial vehicle in Ontario you must have a valid commercial vehicle operator’s registration (CVOR) certificate, and that the CVOR program monitors operators’ safety records. Whether a particular bucket truck or chip truck falls under that depends on the vehicle, so ask the seller and the Ministry of Transportation. Outside Ontario, ask the province’s transport ministry what applies; Transport Canada says regulations governing commercial vehicles, drivers and motor carriers in Canada are based on the National Safety Code standards. Ask for the company’s safety record and any inspection history, and ask the insurer whether the claims record or the work mix would change the cost of coverage once you own it.

Claims against the assets and the workers’ compensation account

Search the personal property registry for liens against the equipment before you rely on the seller’s word. Ontario’s guidance says to search before buying a used car or other used goods, and Alberta says to search the personal property registry before buying any items that are considered personal property. The Workplace Safety and Insurance Board (WSIB) in Ontario says a purchaser of assets should get a purchase certificate, and that it may hold the purchaser liable for all amounts the vendor owed up to the date of sale if no valid certificate is obtained.

• List which credentials, permits and registrations you hold and which you must obtain.
• Ask who on the crew holds the key certifications and whether they plan to stay.
• Ask for contract dates, safety and claims history, and storm-year income.
• Search the personal property registry and request the workers’ compensation clearance.
• Have an adviser confirm what changes if you buy assets rather than shares.