A distribution business is really a bundle of relationships — supplier agreements, often exclusive to a territory, and the customer contracts they feed. Both tend to carry their own consent language, and if the business imports, CBSA compliance adds a federal layer that runs on its own timeline.
Part of Industrial & Manufacturing — see the family overview.
Every figure below is a typical Canadian deal-market pattern, not a valuation — use it to sanity-check what you're being told.
| Metric | Typical benchmark | Use this to |
|---|---|---|
| Valuation convention | Priced off a multiple of normalized EBITDA, weighted by how exclusive and how transferable the supplier relationships actually are.† | Separate the earnings multiple from the value of relationships that may or may not survive the sale. |
| Supplier exclusivity & concentration | Exclusive-territory distribution agreements with one or a few key suppliers are common, and losing one can shift the business's value materially.† | Weigh how much of the price depends on an exclusivity that a supplier could decline to extend. |
| Customer contract mix | Recurring, contracted customer relationships are valued differently from spot or purchase-order business, since the latter carries no assurance of continuity.† | Test whether revenue is built on relationships or repeat luck. |
| Import/customs exposure | Businesses that import carry CBSA compliance history as part of the file, separate from the domestic distribution agreements.† | Confirm customs standing before assuming the supply chain transfers cleanly. |
| Inventory valuation method | Inventory is typically counted and valued separately from the business's earnings-based price, using a method agreed in the purchase agreement.† | Understand what's included in the headline price and what gets settled at closing. |
A supplier distribution agreement's exclusivity and its change-of-control terms are the supplier's own, not the seller's to waive — they're reviewed on their actual wording, independent of whether you buy shares or assets.
Major customer contracts can carry the same kind of change-of-control language as supplier agreements — losing a concentrated customer relationship is a legal risk here, not just a commercial one.
CBSA compliance history travels with the business's import activity, and gaps in it can affect financing and timing as much as any domestic contract issue would.
The same sequence underlies almost every wholesale or distribution business deal — what changes from deal to deal is how long each step takes, and which one becomes the bottleneck.
Reaching an agreement
The offer sets price and key terms — for a wholesale or distribution business it should build in the conditions that actually matter from day one, not just financing.
usually 1–2 weeks†The APS fixes price, structure — asset or share — and closing date, plus the reps, warranties, and holdbacks that protect you if diligence turns up something different than promised.
1–3 weeks to negotiate†Supplier distribution agreements (change-of-control), Customer contracts, Import/customs compliance, Warehouse/lease, Inventory all start moving at once, on separate clocks — this is usually where wholesale or distribution business deals are won or lost.
often the critical path†Getting to closing
Corporate, PPSA lien, and litigation searches confirm what you're actually buying; we chase down licence standing and records the seller doesn't always have to hand.
2–4 weeks, in parallel†Funds, keys, and signed documents change hands, alongside any inventory count and interim authorizations that bridge the gap until final transfers are confirmed.
1 day, once conditions are met†We track final licence confirmation and the staff transition through to completion — nothing is left for you to chase once the deal is done.
1–2 week tail†This is the first real decision in almost every wholesale or distribution business deal — and it changes what you're buying, what you're taking on, and how it's taxed.
| Question | Asset purchase | Share purchase |
|---|---|---|
| What you buy | The shares of the corporation — its supplier agreements, customer contracts, and import history, all in place. | The business's assets — inventory, some contracts where assignable, the warehouse lease, and goodwill. |
| Supplier distribution agreements | Generally continue automatically, subject to reviewing whether change-of-control language is triggered anyway. | Each agreement reviewed individually for assignability; supplier consent obtained where required. |
| Customer contracts | Generally continue automatically, subject to the same change-of-control review. | Each contract reviewed individually for assignability; customer consent obtained where required. |
| Import/customs compliance | Compliance history and any importer standing stay with the corporation. | Buyer generally establishes its own importer standing and compliance record. |
| Tax angle | Seller may access the lifetime capital gains exemption on qualifying shares. | Buyer gets a stepped-up cost base on the assets purchased; an HST election may apply. |
| Seller's liabilities | Come with the company, known and unknown — diligence matters more here than in most sectors. | Generally stay behind with the seller's existing corporation. |
| Typical use | Common, particularly where exclusive supplier territories or major customer contracts make continuity of the corporation valuable. | Considered where the buyer wants the inventory and warehouse without the corporation's history. |
The shares of the corporation — its supplier agreements, customer contracts, and import history, all in place.
The business's assets — inventory, some contracts where assignable, the warehouse lease, and goodwill.
Generally continue automatically, subject to reviewing whether change-of-control language is triggered anyway.
Each agreement reviewed individually for assignability; supplier consent obtained where required.
Generally continue automatically, subject to the same change-of-control review.
Each contract reviewed individually for assignability; customer consent obtained where required.
Compliance history and any importer standing stay with the corporation.
Buyer generally establishes its own importer standing and compliance record.
Seller may access the lifetime capital gains exemption on qualifying shares.
Buyer gets a stepped-up cost base on the assets purchased; an HST election may apply.
Come with the company, known and unknown — diligence matters more here than in most sectors.
Generally stay behind with the seller's existing corporation.
Common, particularly where exclusive supplier territories or major customer contracts make continuity of the corporation valuable.
Considered where the buyer wants the inventory and warehouse without the corporation's history.
We tell you which structure fits — before you sign anything.
Different lists depending on which side of the deal you're on — both matter for how smoothly closing goes.
No open-ended hourly surprises — the cost is confirmed in writing before any work begins.
| Type of work | Fee | How it's confirmed |
|---|---|---|
| Straightforward purchase or sale | Starting from $3,388.87 Our charges · taxes included | Confirmed in writing once we see the agreement. |
| Larger or more complex deal | Quoted to scope | Short call → fixed written quote before any work begins. |
| Searches, filings & third-party fees | At cost | Itemized on your invoice, not marked up. |
A single-warehouse distributor with a manageable supplier and customer list and a straightforward lease.
Start my file →A distributor with an exclusive supplier territory at risk, concentrated customer contracts, or import/customs history that needs deeper diligence.
Book a consultation →Not sure which you are? That's our job to figure out, not yours. As a rough guide, most deals under a couple of million dollars are the first kind — above that, you're usually in Mergers & Acquisitions territory.
†Typical patterns across Canadian deals — not a quote or advice; every deal is confirmed on its own facts.
Not automatically. Exclusivity terms are the supplier's own contractual grant, and many carry change-of-control language that lets the supplier revisit the arrangement on a sale. We review that clause specifically, since losing exclusivity can shift the business's value more than almost anything else in a distribution deal.
Often, yes — many distribution and supply agreements define change of control broadly enough to be triggered by a share sale, so the contract's own wording controls, not the label you put on the transaction. We check your material customer contracts individually rather than assume a share structure avoids this.
It adds CBSA compliance history and importer standing as a separate diligence item, generally run alongside the domestic contract review rather than replacing it. A clean compliance record matters to financing and timing much the way a lease or a contract does.
Typically separate — inventory is counted and valued at or near closing under a method the purchase agreement spells out, on top of the agreed price for the business itself. We make sure that method — who counts, how obsolete stock is treated — is settled before closing day, not improvised on it.
Because supplier and customer consent processes tend to run in parallel and each has its own pace, plus more thorough diligence given that share sales are common and liabilities come with the company. We sequence those workstreams as tightly as the facts allow, but the underlying consents take the time they take.
| Resource | Official link |
|---|---|
| Canada Border Services Agency (CBSA) — importing Import/customs compliance | Visit www.cbsa-asfc.gc.ca |
| Personal Property Security Registration (PPSR) Inventory and equipment lien searches | Visit www.ontario.ca |
| Employment Standards Act — general guide Staff continuity on a sale | Visit www.ontario.ca |
Where we close wholesale or distribution business deals
Tell us about your wholesale or distribution business deal — we'll point you the right way and confirm the cost in writing before any work begins.