BL Pharmtech, a Kosdaq-listed health functional food company, said Friday that it has completed the sale of its subsidiary, BL Healthcare, to Kwangdong Pharmaceutical.

BL Healthcare specializes in health functional foods and is engaged in bio-new material research and functional cosmetics business.

On Dec. 7, BL Pharmtech signed a memorandum of understanding (MOU) regarding the transfer of shares of BL Healthcare to Kwangdong Pharmaceutical.

Following due diligence and additional follow-up procedures, the sale of 58.74 percent of BL Healthcare shares for 30 billion won ($23.2 million) was successfully concluded.

Through this transaction, Kwangdong Pharmaceutical, which needs to expand its nutraceutical business, gained a production base, while BL Pharmtech improved its financial position and secured liquidity.

In July, Kwangdong invested 3 billion won to establish KD Health Bio to develop and manufacture health functional foods.

Through this acquisition, Kwangdong aims to establish synergies between BL Healthcare and KD Health Bio.

BL Pharmtech plans to use a portion of the proceeds to repay 4.95 billion won in outstanding convertible bonds and to acquire Anyone F&C, a distribution company.

Acquiring Anyone F&C is a strategy to strengthen overseas business based on specialized distribution, not limited to the domestic health functional food business.

"We will reorganize our business into specialized distribution, diagnostic business, and new drug development through subsidiaries to improve performance," a BL Pharmtech official said, "We will produce tangible results with AI diagnosis deep learning models with the highest accuracy."