National Veterinary Care Ltd (ASX:NVL) announces 4 more acquisitions, is it a buy?

National Veterinary Care Ltd (ASX: NVL) has announced that it is acquiring four more clinics, is it a buy?

National Vet Care is the second largest veterinary business in Australia and New Zealand, it’s rapidly catching up to Greencross Limited (ASX: GXL).

These four new clinics are based in Australia and are in the company’s existing geographic clusters along the eastern seaboard. They generate annualised revenue of around $6.5 million and total earnings before interest and tax (EBIT) of approximately $1.36 million.

This seemingly puts the four clinics on an EBIT margin of nearly 21%, which is attractive compared to the company’s current network which is targeting a longer-term earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 16%.

The total cost for the four acquisitions will be $7 million, consisting of upfront payments of $5.6 million and deferred components of $1.4 million.

Managing Director Tomas Steenackers said “In addition to our recent acquisition in New Zealand of the Pet Doctors Group, we have identified four high quality acquisitions in Australia that have been performing strongly and are aligned culturally with NVC in terms of focus on people and systems.”

He also said that the Pet Doctors acquisition integration is tracking ahead of schedule.

Once these acquisitions are completed the total number of clinics for National Vet Care will reach 97. In has come a long way in only a few years.

Foolish takeaway

Before these acquisitions National Vet Care was projecting revenue to grow by 40% in FY19 and a slight deterioration in the EBITDA margin due to the Pet Doctors acquisition, which should have led to a decent double-digit increase of profit.

National Vet Care continues to grow its annualised revenue and EBITDA. Until it reaches 150 clinics it seems there is plenty of growth ahead. I’d be happy to buy some shares at today’s price.

Another growth share I really like the look of is this top share that I already own in my portfolio.

The best dividend stock to buy in November

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.

Motley Fool contributor Tristan Harrison owns shares of NATVETCARE FPO. The Motley Fool Australia owns shares of and has recommended Greencross Limited. 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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.