Wednesday 12th September 2018
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Australia's National Veterinary Care will pay up to A$27 million for Pet Doctors NZ to fast-track its expansion on this side of the Tasman.
The Queensland-based company will pay A$22.7 million upfront for the 23 clinics and two training centres with earn-outs of up to A$4.3 million. National Veterinary Care (NVL) already has 10 clinics with a database of 28,000 pet patients and 130 staff in New Zealand. Adding the larger Pet Doctors, with its 300 staff and 55,000 pet patients database, makes it the biggest vet chain in New Zealand and diversifies the group's revenue outside Australia.
"The Pet Doctors acquisition will be our largest acquisition since listing on the ASX in 2015 and is an excellent strategic fit with NVL's existing business, in particular expanding its New Zealand footprint," managing director Tomas Steenackers said in a statement. "The compatibility of systems between NVL and Pet Doctors will streamline the integration of the Pet Doctors clinics."
NVL is the latest Australian firm extending its reach into New Zealand, with Animates joint owner Greencross opening new outlets on this side of the Tasman during the past year.
Pet Doctors, which counts private equity firm Pioneer Capital as a cornerstone investor, has been buying rival clinics for the past decade and advertises itself as an exit for vets looking to sell up.
NVL will immediately seek to cut back-office costs in the enlarged New Zealand operation to A$1.5 million a year from A$3.2 million. It may shut clinics it deems inefficient.
Pet Doctors will add annualised revenue of NZ$31.2 million, earnings before interest and tax of NZ$4.5 million, and deliver earnings per share growth of mid-single digits, NVL said.
NVL plans to raise A$18 million in a placement to institutional investors at A$2.25 a share to fund the acquisition. It will also draw on A$6.2 million of debt.
The ASX-listed shares rose 0.9 percent to A$2.37.
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