Wool Equities is selling its majority shareholding in Covita Ltd and a minority holding in Paraco Ltd to AgResearch for $350,000.
The transaction would free up capital, and put Wool Equities in a stronger cash position to focus on the development of Keratec's technologies, said Wool Equities chairman Andy Pearce.
Keratec creates products such as cosmetics and medical applications from keratin -- proteins extracted from wool, and the main constituent of skin and hair.
AgResearch owns the remaining 25.1 percent of Covita, the owner of Orico which specialises in muscle growth and development research. Orico also holds the licence to commercialise Paraco's parasite technology.
AgResearch also owns 33.3 percent of Paraco, with the remainder held by Meat & Wool NZ's subsidiary Agritech Investments.
The sale, subject to shareholder approval, would be completed by August 4.
The sale is also conditional on other transactions by Wool Equities, its Keratec subsidiary, and AgResearch, including the licensing of AgResearch to use Keratec's intellectual property in waterproof, windproof and breathable fabrics.