Selling a medical transport company in Canada

Selling a medical transport company can involve more than its vehicles and a customer list. If its income comes from contracts with a hospital or health authority, and its right to operate rests on a licence or certificate granted to the operating entity, the sale has to carry those across. This guide is for an owner who has already decided to sell and wants the sequence: what to learn first, what to prepare, and what a buyer will ask to see.

Read your contracts before you list

Pull every health-authority and hospital agreement and read its assignment, change-of-control and termination clauses. The question is simple: can this contract move to a buyer, and who must agree? If a counterparty must consent, or may re-tender the work on a sale, learn that now, because it can decide whether the buyer is purchasing a business or a fleet. Approach the counterparty only with your lawyer’s advice on timing and on what you may say before a deal is signed.

Find out what the regulator needs

Whether your service is regulated as an ambulance service depends on the province’s legislation and how it defines that service. In Ontario, the Act defines an ambulance service as a service held out to the public as available for the conveyance of persons by ambulance, and bars anyone from operating an ambulance service without a certificate from the certifying authority, and a certificate expires at the end of the period set by regulation and is renewed only if, before it expires, the operator successfully completes the certification process. Ask the regulator, not the buyer, how a change of ownership is handled. Where an operator provides land ambulance services in an upper-tier municipality, the Act also requires at least 120 days’ notice to the municipality and the Director of an intention to cease providing them.

Protect patient information in the process

A buyer may want to look inside the operation, and the records hold patient information. Ontario’s Personal Health Information Protection Act lets a custodian disclose personal health information to a potential successor to assess and evaluate the custodian’s operations if the potential successor first enters into an agreement with the custodian to keep the information confidential and secure and not to retain it longer than necessary for the assessment. Show summaries and de-identified reports first, and keep patient-level files for the point where the agreement is in place and your lawyer agrees.

Expect the buyer to need its own approval

In Ontario, the Ambulance Act lets the certifying authority issue a certificate only to a person who has successfully completed the certification process prescribed by the regulations, and a person who wants to provide land ambulance services must also have been selected under the Act or be otherwise entitled to provide them. Do not assume that a buyer who does not already hold those permissions can step into yours. Ask the regulator whether the certificate can be transferred, or whether the buyer must apply. Then tell prospective buyers early, so that nobody commits money on a mistaken assumption. Outside Ontario, find the province’s own rule before you answer the question.

Assemble what the buyer will ask for

• Contract schedule: each agreement, its term, renewal rights and consent requirements
• Licence and certification records for the company, its vehicles and its attendants
• Fleet list with ownership or lease status, and any liens registered against the vehicles
• Staff list with roles, certifications and tenure
• Financial statements and tax returns, with owner-related costs separated out

Plan on a lender wanting financial information too. BDC lists the business’s financial statements or income tax returns among what a buyer should have when applying, and says the buyer and seller must agree on a purchase price before financing is sought. Having these ready lets a buyer answer a lender’s requests sooner.

Keep the sale quiet and the service running

Staff, referring hospitals and dispatchers may each react to news of a sale. Use a confidentiality agreement with each prospective buyer, share the names of contract counterparties only when a buyer is serious, and plan what you will tell attendants and when. BDC’s guide to selling a business has sections on preparing to sell and on finding a buyer. Consider asking a broker with transportation or health-services experience how disclosure should be managed.

Decide what is being sold

Whether the deal is a sale of shares or of assets may change which contracts and licences move with the business and which need a fresh approval, so ask each counterparty and the regulator. BDC tells a buyer to have a clear transaction structure, asset purchase or share purchase, when applying for financing. Ask your accountant and lawyer to settle this before the first offer, since the structure can affect both tax and regulatory steps. See the buying guide to see what the other side will be weighing.