What is a dump truck and aggregate hauling company worth?

Two dump truck companies can show the same revenue and be priced very differently. The number of trucks says little on its own. What matters is whether those trucks keep getting dispatched next season and what it will cost to keep them on the road while that happens. Where the work is paid per load or per hour, ask what relationships and construction activity it rests on; the useful questions are about where the calls come from, how long the equipment has left, and whether the carrier can still legally operate under its current record. This guide covers what to look at, what to question and why two similar haulers can differ.

Repeat calls beat one-off jobs

Ask how much of the work comes from standing relationships with pits, quarries and paving contractors. A hauler whose trucks are called every week by the same few dispatchers has repeat work that can be documented. A hauler that wins each job on price may have to win it again after the sale. Ask for revenue by customer across several seasons, and ask who at each customer actually calls the dispatcher. If that person is the owner’s friend, that matters. The glossary entry on customer concentration explains why one or two large accounts pull a price down.

The fleet is a cost the earnings have to carry

A mixed fleet of tri-axles, tandems and transfer trucks should be checked against what local jobs actually call for. Age matters too. A truck at the end of its useful life is a replacement bill the buyer inherits, and the day rate has to pay for it. Separate what the trucks could be sold for from what they earn, and get an independent view of condition rather than relying on the seller’s word. An equipment appraisal is one way to get one. Ask when each unit was last rebuilt and what the replacement cycle has really cost. Two companies with the same trucks can be priced apart if one has been spending on replacement and the other has been running its fleet down to look more profitable.

Public work is valuable and exposed

Municipal and provincial infrastructure work may be awarded by tender, and tendered work can be lost on a rebid. Ask how much revenue came from tenders, when each contract ends and what prequalification the company holds. As a seller, ask yourself how much of your next two seasons is already booked. A signed contract and a customer’s verbal promise are different kinds of evidence, so bring both and be clear which is which. If tenders are a large part of the picture, bring the award letters, the end dates and any re-tender notices to the first meeting.

The safety record is part of the asset

Transport Canada describes the National Safety Code as a code of minimum performance standards, with standards ranging from commercial driver licence requirements to carrier facility audits. In Ontario, the Ontario government says the CVOR program monitors and evaluates operators’ safety records, and that an “Unsatisfactory” safety rating will cause operating privileges to be suspended or cancelled throughout Canada. A carrier’s record is therefore worth checking before relying on the value of its trucks. Transport Canada says provincial and territorial regulations govern the operation of the commercial truck industry, apart from the rules it sets for federally regulated (extra-provincial) carriers, so check the system that applies to the company.

How earnings are recast

Reported profit is recast to show what a new owner would earn. The adjustments to look at are the owner’s pay, personal vehicles run through the company, and one-time repairs. The harder adjustments in this business are the opposite direction: a fleet that was kept running without enough replacement spending flatters profit, and owner-operators paid less than a hired driver would cost flatter it too. The glossary entry on seller’s discretionary earnings shows the starting point. Add back what is genuinely personal and deduct what a replacement fleet would cost. The Canada Revenue Agency notes that, depending on your situation, you may have a recapture or a terminal loss of capital cost allowance on the sale of your assets, so the tax treatment of the trucks is part of what an owner nets, separate from what a buyer pays. Raise that with an accountant before anchoring on a price.

• Revenue by customer for several seasons, with the dispatcher each customer uses
• Age, condition and last-rebuild date for every truck and trailer, ideally confirmed by an independent inspection
• A list of tendered contracts with end dates and prequalification status
• The carrier’s safety record from the province that issues its registration, requested directly
• Owner-operator arrangements, since drivers paid below replacement cost distort recast earnings