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Is the National Veterinary Care Ltd (ASX:NVL) share price a buy after increasing its debt facilities?

The National Veterinary Care Ltd (ASX: NVL) share price rose 2.7% today after the company announced that it has increased its debt facilities.

National Vet Care has arranged its new facility arrangements with the company’s existing financier Australia and New Zealand Banking Group (ASX: ANZ).

There is an increase of $19 million in the term loan facility to $61 million.

There was an increase of $0.75 million in the working capital facility, which incorporates the bank guarantee and overdraft sub-facilities to $3.5 million and a new facility term of three years which expires in June 2021.

The actual terms of the facilities are similar to the old facility’s terms.

Managing Director Tomas Steenackers said “We are delighted that we continue to receive strong support for our business model and growth strategy from our financiers, who we have worked with since inception of the business three years ago.

“The increase in facilities and term extension provides National Vet Care with significant capacity to support our forecast growth and strong FY19 acquisition pipeline.”

Is National Vet Care a buy?

I think it’s one of the most promising small caps on the market. It has been steadily acquiring clinics, which means that it has a lot of annualised revenue (and profit) that won’t be fully realised until the FY19 result.

The pet industry has a lot of likeable factors including defensive earnings, recurring earnings due to annual pet visits, National Vet Care has a strong pet membership program and it is generating organic revenue growth of 3%.

National Vet Care is trading at around 24x FY18’s estimated earnings. I’d be happy to buy some shares at the current price.

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Motley Fool contributor Tristan Harrison owns shares of NATVETCARE FPO. The Motley Fool Australia owns shares of NATVETCARE FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.