TBG Diagnostics Ltd., through its China-based unit TBG Biotechnology Xiamen, is acquiring Zhangsha ZhangYe Medical Laboratory Corp., a medical laboratory testing services company.

Under the deal, Greenslopes, Australia-based TBG Diagnostics will transfer 42.1% of TBG Xiamen's shares to the founding shareholders of China-based Zhangsha ZhangYe.

TBG Diagnostics, formerly known as Progen Pharmaceuticals Ltd., develops and sells molecular diagnostics kits, assays, instruments, and services in Taiwan, China and the U.S.

Dongyuan Huaxin (Beijing) Capital Management Co. Ltd., a Chinese private equity firm, will also buy 11.25% of TBG Xiamen's share capital for 10.7 million Chinese yuan in cash.

The proceeds will be reinvested in TBG Xiamen and will be used to expand the company's laboratories, diagnostic kits, sales capabilities and distribution channels.

As of Dec. 14, US$1 was equivalent to 6.91 Chinese yuan.