In morning trade the Vita Group Limited (ASX: VTG) share price has sunk into the red and is down 5% to $1.47.
This latest drop brings its year-to-date decline to over 55%.
Why are its shares down today?
This morning Vita announced a conditional agreement to acquire Clear Complexions for $9.5 million, comprising $8.5 million in cash and $1 million in Vita shares.
This acquisition will mark Vita's entry into the non-invasive medical medical aesthetics (NIMA) market which is estimated to be worth $1 billion per annum in Australia.
According to the release, the category offers double-digit annual growth and encompasses non-surgical cosmetic treatments such as anti-wrinkle injectables, chemical facial peels, dermal fillers, laser and light-based therapies, body sculpting, and tattoo removal.
Quite a change of direction for the Telstra Corporation Ltd (ASX: TLS) retail store operator.
And judging by the share price decline today, the market isn't convinced by the move.
The acquired business is anticipated to deliver annual revenue of around $10 million over the next 12 months, with EBITDA expected to be in the region of $1 million.
Should you invest?
While I can understand why Vita is looking to diversify its business following the changes to its remuneration and store count by Telstra, this isn't necessarily what I was expecting.
Although it could prove to be a successful move by the company, I'll be sitting this one out and waiting to see how the business develops.
In the meantime I think there are far better and less risky investment options in the retail space such as Premier Investments Limited (ASX: PMV) and Super Retail Group Ltd (ASX: SUL).
