[NA Eun-kyung, Edaily Reporter] Graphy has defined its relationship with MegaGen Implant, or MegaGen, primarily as a business partnership following its acquisition of management control of Ray.

Although MegaGen holds a 7.69% stake in Ray, there are currently no discussions about granting the company additional representation on Ray’s board, according to Graphy. Graphy and Ray plan to maintain independent management structures while expanding cooperation with MegaGen in products and distribution.

Shim Woon-seop, chairman of Graphy Group, told Edaily in an interview at Graphy headquarters in Seoul’s Geumcheon District on September 22 that there are no plans for MegaGen officials to join Ray’s board.

“We have discussed this matter thoroughly with MegaGen CEO Park Kwang-bum,” Shim said.

‘No prior coordination’ with MegaGen

MegaGen attempted to secure a seat on Ray’s board at an extraordinary shareholders’ meeting in May but failed. It later increased its stake in Ray to 7.69%, drawing market attention to the relationship among the three companies after Graphy moved to take control of Ray.

Speculation arose that Graphy and MegaGen were competing for control of Ray or that the two companies had coordinated in advance to pursue the acquisition together.

Shim rejected both scenarios.

“When we first received an acquisition proposal from Ray, we hadn’t even assessed the intentions of shareholders, stakeholders, or investment institutions,” Shim said. “There was absolutely no prior coordination with MegaGen. While we were conducting our internal review, we learned through a regulatory filing that MegaGen had been acquiring Ray shares.”

Shim said Graphy later explained its business plans to MegaGen to prevent the situation from being perceived as a conflict or dispute.

“CEO Park agreed with our approach,” he said. “I believe the matter was resolved satisfactorily without the conflict escalating.”

MegaGen still lists its investment purpose for its Ray stake as “influence over management” in regulatory filings. Shim, however, said Graphy currently views MegaGen’s stake as a friendly holding.

“CEO Park told me, ‘We will support you as a friendly partner, so you can focus on running the company,’” Shim said. “I trust what he said.”

Ray will remain a separately listed company and retain its brand following the acquisition. Ray CEO Lee Sang-chul will oversee product development and organizational operations, while the board, chaired by Shim, will determine business strategy and major investment priorities.

“Graphy Group” does not refer to a separate corporation or holding company. It is an umbrella term for Graphy and Ray. The two companies will retain their respective brands and business structures while cooperating in areas such as joint development and cross-selling.

“As the acquiring company, we will work to maximize the strengths of the acquired company,” Shim said. “Our goal is to preserve the technology, organization, and global network Ray has built over more than 20 years while adding Graphy’s materials and treatment solutions.”

Why Graphy Sought Management Control

Graphy chose to acquire management control of Ray rather than make a minority investment or settle for a business partnership because it wanted to closely coordinate the companies’ product development and business strategies.

Graphy offers shape-memory clear aligners and 3D-printing materials, but delivering these products to dental practices requires a digital infrastructure that encompasses patient diagnosis, intraoral scanning, treatment planning, and device manufacturing.

Ray offers diagnostic equipment—including cone-beam computed tomography (CBCT) systems and intraoral scanners—as well as related software and an overseas sales network.

Shim said Graphy needed Ray’s broader business infrastructure, not just a specific device or distribution channel. Building its own overseas subsidiaries, sales and service organizations, and software development capabilities in each market would require significant time and investment. Acquiring Ray allows Graphy to accelerate that expansion process.

Under a simple partnership, each company would inevitably operate according to its own priorities, making it difficult to coordinate software development and product upgrade schedules. Graphy also concluded that a minority investment would provide limited ability to coordinate Ray’s long-term investment and product development strategies.

“It would be difficult to generate synergies across the entire business model through a simple partnership or minority investment,” Shim said. “We acquired management control so we could align our business direction and push aggressively in areas where investment is needed.”

Graphy financed the acquisition with 25 billion won ($18 million) in convertible bonds and another 25 billion won in convertible preferred shares.

Graphy stated that both the coupon rate and the maturity interest rate on the convertible bonds are 0%, meaning there is no immediate cash interest burden. The company currently sees no need for additional financing.

Shim also downplayed the possibility of further workforce reductions following the acquisition.

“Graphy and Ray have different core businesses, so there isn’t much organizational overlap,” he said. “We plan to expand collaboration in areas such as joint development and sales, and we may actually increase staffing in teams responsible for creating synergies between the two companies’ products.”

Ray to Reduce Reliance on China, Expand into Aesthetics

Following the acquisition, Graphy plans to reduce Ray’s dependence on sales in any single country while expanding its business into medical aesthetics.

In China, the company plans to differentiate itself by combining Graphy’s materials with Ray’s diagnostic solutions rather than pursuing growth through low-priced equipment. It also plans to increase sales in other markets.

“China is an important market, but local brands have significantly improved, and we should not engage in a price war with low-cost products,” Shim said. “We need to combine Graphy’s material solutions with Ray’s diagnostic equipment while growing in other countries to reduce our dependence on China.”

Medical aesthetics will be another pillar of diversification.

Ray sells RAYFace, a facial scanner that captures a patient’s face from multiple angles and reconstructs it into 3D data.

Raycell, a Ray subsidiary established last year, will manage the medical aesthetics business. Raycell has secured an exclusive supply of decellularized extracellular matrix (ECM) raw materials from the organoid company Celltregen and is preparing to commercialize ECM-based skin boosters, cosmetics, and regenerative creams.

Graphy plans to combine these products with its orthodontic and prosthetic materials to create a one-stop business model covering diagnosis, the production of orthodontic devices and dental prosthetics, and skincare.

The concept involves integrating facial and intraoral scanners, diagnostic equipment, materials, and software into a single system, enabling dental clinics to expand their services into the field of aesthetics.

“Orthodontics is closely linked to aesthetics,” Shim said. “We want to build a full-package solution where patients can receive skin care at a dental clinic, undergo facial and intraoral scans, and have dental prosthetics or orthodontic devices produced the same day.”