Europe-based bio-pharma company MGC Pharma (ASX:MXC) has completed a deal to sell its MGC Nutraceuticals business to US health and wellness group Onassis Holdings Corp.

The transaction will see Onassis take 100 per cent ownership of the Nutraceuticals business in a share-based deal valued at $US6m (~$8.5m). MGC will also gain a supply agreement with Onassis for CBD, raw materials and other proprietary production intellectual property.

Onassis is an OTC-listed company focusing on cannabis and hemp manufacturing and production. The business was founded by serial entrepreneur and investor Eliron Yaron, who has been helping build and grow public and private companies across a host of technology and financial sectors since 1994.

Once the acquisition is completed, Onassis will then undertake a $US8m capital raise of its own, with $US2.5m of that dedicated to the commercial roll out and expansion of Nutraceuticals in the US and North America.

MGC shareholders eligible to receive Onassis stock as part of the Nutraceuticals deal will have priority access to the Onassis’ capital raise, and can submit commitments ahead of its official opening.

Speaking with Stockhead, MGC executive chairman Brett Mitchell said the company took its time to find the right buyer. He added the sale to Onassis gave MGC strategic exposure to the US market while freeing up capital and resources to focus on its core medicinal cannabis business.

“We spent around nine months looking at various divestment options, to extract value for the intellectual property that we developed with Nutraceuticals. And we’ve been working on this opportunity with Onassis for over six months,” Mitchell said.

He also cited Yaron’s successful track record of raising money in US capital markets.

“We’re backing his ability to do the same again here, and build a portfolio of integrated cannabis sector businesses,” Mitchell said, adding that Nutraceuticals will also get the capital backing and broader sales opportunities it needs to grow.

In that context, Mitchell said the receipt of $6m in Onassis shares was a “significant win” for MGC, allowing it to divest a non-core business while also participating in the upside from the opportunities its new owner can pursue.

“It gives us exposure to US equity markets, where cannabis valuations are still higher than in Australia, while also securing the proper funding to build that business out,” Mitchell said.

“That $US6m asset will become a core investment holding, which we can then use at a time in the future to provide strategic working capital for MGC Pharma.”

Settlement for the US capital raising is expected to be finalised in Q4 this year.