Finance and growth
Buying another plant hire business
How to buy another plant hire business: finding one, valuing the fleet and goodwill, due diligence, asset or share purchase, TUPE, funding and integration.
Key takeaways
- Buying gives you customers, fleet, staff and a yard at once, but you inherit problems too.
- Value the fleet at realistic resale, then decide what the customer base is really worth.
- Due diligence covers machines, customers, finance, staff, compliance and liabilities.
- An asset purchase leaves most liabilities behind; a share purchase takes the whole company.
- Employees usually transfer under TUPE on their existing terms.
Why buy rather than build
- Instant fleet, customers and staff.
- An established yard and O-licence.
- Removes a competitor or adds a new area.
- Owners retiring are common in plant hire.
Finding a business
- Owners near retirement in your area or a neighbouring one.
- Business brokers and accountants.
- Suppliers and dealers, who know who's thinking of selling.
- Approach directly and discreetly; many sales are never advertised.
Valuing it
| Element | How to think about it |
|---|---|
| Fleet | Realistic resale value of each machine, after condition checks, less outstanding finance |
| Yard and property | Lease terms or property value; transferability |
| Customer base | Regular accounts, revenue concentration, whether customers follow the owner |
| Profits | Adjusted for owner's pay and one-off items; multiples vary widely |
| Liabilities | Debts, finance, disputes, dilapidations |
Many small hire businesses sell for close to fleet value plus a modest amount for goodwill. Goodwill is worth less if customers are loyal to the owner personally.
Due diligence
- 01
Fleet
Inspect every machine; check ownership, finance and theft registers. See used plant checklist.
- 02
Customers
Revenue by customer, contracts, debtor ages.
- 03
Finance
Accounts, VAT, tax, finance agreements and their transferability.
- 04
Staff
Contracts, pay, holidays, disputes.
- 05
Compliance
O-licence, PUWER and LOLER records, H&S, environmental.
- 06
Legal
Leases, hire terms, claims, insurance history.
Asset or share purchase
| Asset purchase | Share purchase | |
|---|---|---|
| What you buy | Chosen assets: machines, contracts, goodwill | The company, including everything it owns and owes |
| Liabilities | Mostly stay with the seller | Come with the company |
| Contracts and licences | Need transferring or re-applying (e.g. O-licence) | Stay with the company |
| Tax | Different for buyer and seller | Different for buyer and seller |
Take legal and tax advice. The best structure depends on the deal.
Staff and TUPE
When a business transfers, employees usually move to the buyer automatically on their existing terms under the TUPE regulations. There are consultation duties for both seller and buyer. In a share purchase the employer doesn't change. Take employment advice early.
Funding
- Asset finance or refinance against the fleet.
- Bank loans or business acquisition finance.
- Deferred payments or earn-outs to the seller.
- Your own cash and retained profits.
After you buy
- Meet key customers quickly, ideally with the previous owner.
- Keep staff informed and engaged.
- Move to your booking system, procedures and branding gradually.
- Sell machines that don't fit your fleet.
FAQs
Common questions
How do you value a plant hire business?
Asset purchase or share purchase for a plant hire business?
Do staff transfer when you buy a plant hire business?
Keep going
Related guides
Expanding your plant hire fleet
When to add machines and how to fund growth.
Read guide →
Opening a second plant hire depot
Location, licences, staff and systems for two sites.
Read guide →
Used plant checklist
Tick-box checks before you pay for a used machine.
Read guide →
Finance
Hire purchase, leases and refinance for new hire firms.
Read guide →
This guide is general information for people setting up a plant hire business in the UK. It is not legal, tax, insurance or financial advice. Rules and thresholds change, so check current guidance on GOV.UK and take advice from an accountant, solicitor or broker before acting.