Selling a fuel delivery company in Canada

You have decided to sell. The order of work matters here, because a fuel delivery company carries a licence that does not move with the shares or the assets, a depot whose history a buyer may test, and customers who rely on you for heat. The steps below follow the order an owner would meet them: first the paperwork a buyer may ask for, then the regulator, then confidentiality, then the sale itself. The regulatory points describe Ontario, where TSSA is the safety authority; other provinces run their own regimes and their rules should be confirmed locally.

Clean up the file before anyone sees it

Start with the records a buyer may ask for. For each tank you own, gather the registration, installation and inspection history. TSSA says an underground tank registration produces a registration number, which can be given to your fuel distributor so supply is not interrupted. Look for gaps now. If a tank was removed, TSSA says the owner or operator of a fuel storage facility must submit an Environmental Assessment Report under its Environmental Management Protocol on removal or site closure, so that report belongs in the file as well.

The licence does not travel with the business

TSSA’s change-of-ownership page says licences are not transferable and that the onus to apply for a new licence falls on the new owner. It lists separate change-of-licence-holder forms for areas such as retail outlets and bulk storage plants, fuel transport licences and several propane activities. Which forms apply to you depends on what your company is licensed to do, so ask TSSA directly. In practical terms, tell your buyer early, and build the closing timeline around the buyer’s application rather than assuming the licence will simply be there on closing day.

Know who answers for the ground

An environmental problem found after closing is something to plan for, so decide with your lawyer before marketing how you will deal with it. Ontario’s Environmental Protection Act requires a person having control of a spilled pollutant, and a person who spills or causes or permits the spill, to notify the Ministry and others forthwith (s.92), and requires both the owner and the person having control to do everything practicable to prevent, eliminate and ameliorate the adverse effect, where a spilled pollutant causes or is likely to cause one (s.93). Any spill at the depot or at a customer site is something a buyer may ask about, so be ready to answer from records, not memory.

Keep the sale confidential

News of a sale can reach customers, drivers, technicians and competing distributors, so decide who is told, and when. Share identifying details only after a buyer signs a confidentiality agreement, and release customer-level data in stages. A first look might show volumes by customer category without names; names and addresses can follow once the buyer is serious. Check with the Ontario Business Registry what is public about your corporation, since basic information about a registered business can be searched by anyone for free.

What the buyer will ask for

Be ready for requests for customer and delivery data, tank and depot records, licences and certifications held by the company and by individual staff, vehicle files, insurance history and any regulator audit correspondence. TSSA says it introduced a Fuel Oil Distributor Audit Program in 2020, so ask yourself whether your company has been through one and keep any results to hand. Ask your advisers how the file will look to a buyer’s lender; no one can promise how a lender will react.

Plan the handover of people and customers

Customers depend on the company for heat, so think about how the handover looks from their side. Decide with your buyer who tells customers, when, and in what words, and whether you will stay on for a transition period. Staff matter just as much: drivers and technicians may hold certifications and customer knowledge the business relies on. Agree early how their roles continue, what is said to them and when, and whether any need a written commitment from the buyer before they hear the news. Think through what happens if staff learn of the sale from someone else.

Choose your structure with advisers

Ask your lawyer and accountant how selling shares rather than assets would change what the buyer takes on and how tax falls on you. Neither choice is right for everyone, and the answer depends on facts a lawyer and accountant must see. Raise the question before you market the company, not after an offer arrives, and ask whether the structure also affects which contracts, leases and tank arrangements need a counterparty’s consent. Ask your advisers to map those consents early, so that none of them becomes a surprise on closing day or a reason for the buyer to reopen the price.

• Pull registrations and inspection records for every tank, company-owned or not
• Locate the Environmental Assessment Report for any tank removal or site closure
• Ask TSSA which change-of-licence-holder forms your buyer will need
• Decide what customer information is shared at each stage, and who may see it
• Brief your lawyer on any spill, order or audit before the first buyer conversation