The National Veterinary Care Ltd (ASX: NVL) share price has gone up 2% after announcing some more acquisitions.
National Veterinary Care wants to be the biggest veterinary business in Australia. It has acquired and integrated 100 veterinary services businesses across Australia and New Zealand. It’s still looking to expand its clinic portfolio through acquisitions and increase earnings organically at each existing clinic.
National Veterinary Care’s Latest Acquisitions
The veterinary business announced this morning that it has entered into binding agreements to acquire veterinary clinics in two locations, one in Australia and one in New Zealand.
These new acquisitions are in existing National Vet Care’s geographic clusters. The New Zealand is a ‘strategic’ acquisition for consolidation with a smaller Pet Doctors clinic to achieve a larger & more sustainable clinic.
The two acquisitions are expected to deliver total revenue of around $2.45 million and total annual EBIT (click here to learn what EBIT means) of around $0.47 million.
Total cost for the acquisition will be $1.94 million, $1.34 million upfront and the rest deferred based partially on earnout conditions.
The acquisitions are still conditional on due diligence, board approval and lease assignments, with settlements expected by the end of November 2019, which will bring the total to 102.
National Veterinary Care Managing Director Tomas Steenackers said: “The New Zealand acquisition provides an opportunity for us to improve the sustainability and secure the future of a smaller nearby Pet Doctors clinic, which is a growth strategy we have previously had some success with in Australia.”
Is The National Veterinary Care Share Price A Buy?
Over the past six months the National Vet Care share price has gone up by 37% as investors return to the small cap space.
A roll-up strategy is not the most compelling business case on the ASX, but National Vet Care certainly isn’t a terrible idea as same clinic revenue increases and FY20 is expected to show 20% revenue growth with a higher profit margin.
It’s valued at around 20 times the 2019 financial year earnings, so it’s priced quite nicely for growth over the next couple of years. But if you’re after the best ASX growth shares it could be better to go for the ones in the free report below instead.
2020: 3 stocks to buy for the long run
Amidst the confusion, some researchers value the entire cloud computing market at approximately $US210 billion. If you ask me, it seems clear as day that this HUGE market is only going to get bigger in 2020 and beyond.
Our top investment analyst has just identified 3 growth stocks in a net cash position, with strong competitive forces... and obvious tailwinds at their back.
Claim your FREE investing report on our analyst's "3 best share ideas for the cloud revolution" when you create a free Rask Australia account.
Our report is 100% free and unlocks hundreds of hours of bonus content.
Disclaimer and warning: The information on this website is general financial advice only. That means, the advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Please read our Terms of Service and Financial Services Guide before using this website.
At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.