Selling a HVAC contractor in Canada

An owner who has decided to sell a heating and cooling contractor is selling a set of customer relationships, a team of qualified people and a group of permissions that belong to people and companies rather than to the business as an object. The order of work matters. Records come first, because every later step depends on them. Licence and registration questions come next, because they may limit who can buy and how fast the deal can close. Then come the safety-board clearances, the structure of the sale, and a confidentiality plan. This guide follows that sequence and points to the regulators that run each step.

Start with records that prove the repeating work

Before any buyer is approached, assemble the maintenance agreements, the service history behind them and the customer list they cover. Be ready to show which agreements are current, when each renews, and what visits were performed. If the history sits in an owner’s notebook or a technician’s phone, move it into one system now. The same records support the recast earnings a buyer or lender may examine. See add-backs for how owner expenses are treated.

Review licences and registrations that do not simply transfer

List every licence, registration and certificate the business relies on, and note who holds each one. TSSA, Ontario’s technical safety authority, says on its change of ownership page that licences are not transferable and that the onus to apply for a new licence falls on the new owner. It also says contractors working on fuel oil equipment must be registered with it. That page covers Ontario only. Confirm the equivalent in each province where the business works; in Quebec, for example, the Régie du bâtiment du Québec publishes guidance on which work requires a licence. Skilled Trades Ontario issues certificates of qualification to individual journeypersons, so ask who holds each certificate and whether those people will stay with the business after the sale.

Gather the workers’ compensation paperwork

Check which workers’ compensation board covers the business in each province where it works. In Ontario, the WSIB issues a clearance certificate that relieves a principal of liability for payment obligations to the WSIB that a contractor may incur on a contract with that principal during the certificate’s validity period, and WSIB policy says a clearance is valid for up to 90 calendar days and is renewable. WorkplaceNL, the Newfoundland and Labrador board, says its clearance confirms a contractor has its own coverage and is in good standing. Check the account status now, resolve anything overdue, and ask your lawyer how the structure of the sale affects what a buyer would take on.

Choose a structure and plan the contracts

The structure of the sale decides what moves. In an asset sale, the buyer takes named assets and the parties decide which contracts are assigned. In a share sale, the company and its history stay intact. Either way, read each maintenance agreement, supplier contract and manufacturer dealer arrangement for assignment and consent terms, and read the premises lease the same way. If a contract needs the other side’s consent, that is a step to plan for. Raise it with the lawyer early rather than finding it during the buyer’s review.

Questions to put to your advisers and regulators

Before listing, write down the questions only others can answer. Ask each regulator that issues one of your licences what a change of ownership requires, and in which order the steps must happen. Ask your lawyer which contracts need consent and whether the structure you prefer changes that list. Ask your accountant how the recast earnings will be presented and what questions a buyer may raise about them. Ask your insurer whether a pending sale affects current coverage. Keep the answers in one file so that a serious buyer receives consistent information, and update the file when a regulator or adviser changes its answer.

Keep it confidential, then tell people in order

Technicians and customers are the two groups to plan for. Share only what is needed, and require a signed non-disclosure agreement before sharing names or numbers. Once a buyer is committed, plan who hears what and when. Decide whether key technicians should hear from the owner directly, ideally with retention terms in place, and how customers with maintenance agreements will be told about continuity. Decide in advance who answers questions, so that the message is the same from the owner, the office and the technicians.

• Maintenance agreements with renewal dates, and the visit records behind them
• A schedule of every licence, registration and certificate, with the holder’s name and expiry
• Safety-board account status and any clearance letters on file
• Vehicle, tool and equipment lists with ownership and any liens
• Manufacturer, supplier and lease agreements with their assignment and consent terms