Selling a flatbed carrier in Canada

An owner who has decided to sell a flatbed carrier faces a sequence more than a single event. The carrier’s safety registration is held in the carrier’s name, the drivers are the ones who carry the securement skill, and the shippers are the ones who keep the trucks loaded. Each of those could be affected by news of a sale. Preparation therefore starts with the records and the people, and only later with the marketing. The steps below follow that order, and they assume you will work with a lawyer and an accountant from the start.

Get your own safety record in order first

Pull your own record before you list. In Ontario, a CVOR abstract summarizes a carrier’s safety performance, including collisions, convictions and inspections, and a carrier can review its own CVOR record online for free. Read yours as a buyer would. If it shows a pattern, write down what changed since and be ready to explain it. Alberta’s page sets out when a Safety Fitness Certificate can be renewed relative to its expiry date, so check where yours stands before listing.

Know which regime you operate under

Transport Canada says provincial and territorial regulations govern the commercial truck industry except for the rules it sets for federally regulated (extra-provincial) carriers, that federal authority covers only extra-provincial carriers moving goods across a provincial or international boundary, and that the Motor Vehicle Transport Act allows provinces and territories to regulate those carriers on behalf of the federal government. A flatbed that crosses a provincial or international boundary may sit under the federal Motor Carrier Safety Fitness Certificate Regulations. Alberta publishes criteria for deciding whether a carrier is regulated under federal or provincial rules, and says a change in operating status may require compliance with different regulatory requirements. Confirm which applies to you before a buyer asks.

Choose the structure with your advisers

A share sale and an asset sale move different things. Ask the regulator in each province you operate in how a sale of shares and a sale of assets would each be treated: whether the registration stays with the company, and whether a buyer of assets must apply for its own registration and for any permits you hold. Your lawyer can then advise which structure fits. Read asset sale versus share sale in Canada before you meet a buyer. Write down, for each province you operate in, the regulator’s name, the registration you hold and the person who would answer your questions about a change of ownership. Ask your accountant how each structure would affect you, and ask your lawyer which documents would need to change hands. Bring those answers to the first meeting with a buyer’s advisers.

Keep drivers and shippers steady

Decide who learns of the sale, and when. BDC says a change in business ownership can be disruptive for employees, customers and suppliers, and its selling guide suggests working out a transition plan with the buyer that includes a plan to retain them and to communicate with them about the change. It also notes that, depending on a listing site’s confidentiality procedures, word could get out that you are selling. Ask your lawyer about a signed confidentiality agreement before any buyer sees customer names, and about when to introduce a buyer to key shippers. Consider whether key drivers should hear from you directly, and whether retention arrangements are worth discussing with your lawyer.

• Your current safety record from each registry you operate under, with notes on any entry you expect questions about
• A list of trailers by type, age and lien status, with securement equipment inventoried
• Revenue by shipper for recent years, showing which freight is repeat work
• Driver list with tenure and any planned retirements
• Insurance and claims history, including any cargo claims

What to have ready for a buyer

Have ready the registration documents, the safety record, trailer titles, shipper contracts or rate sheets, maintenance records and insurance history. Prepare honest answers on why you are selling, what the drivers will do, and whether any large shipper has said it would leave. Where a question exposes a weakness, such as a securement-related claim, ask your lawyer how to disclose it with context. For the broader process, see selling a trucking business in Canada.

Timing and the cycle

Ask whether your freight follows building and manufacturing activity, and if so how your earnings looked at different points in that cycle. Ask a valuator how much of recent earnings came from a strong stretch and how much would repeat. Be ready to show how the company handled slower periods, whether it kept its drivers through them, and whether it held shippers outside its biggest sector. Your valuator can say how much weight that evidence carries. Ask your accountant to prepare the figures behind it, and keep them with the rest of your sale records.