UPDATE 1-Sweden's Ratos picks advisers for Inwido IPO -sources

Mon Mar 17, 2014 7:27am EDT

(Adds detail, background)

STOCKHOLM, March 17 (Reuters) - Swedish private equity firm Ratos has appointed Carnegie and Handelsbanken to advise it on a listing or sale of window and door maker Inwido, its biggest holding, two people familiar with the matter told Reuters.

A listing would coincide with an expected post-financial crisis upturn for residential construction in Sweden, Inwido's largest market, and mark Ratos's first sizable divestment in more than a year.

The sources declined to be identified as the process is not public. Ratos, Carnegie, Handelsbanken and Inwido declined to comment.

Inwido would add to a growing Swedish IPO pipeline as owners scramble to list their holdings on the back of high equity market valuation, with three IPOs since late 2013 ending a drought of two and a half years.

Shares in toilet and bath maker Sanitec, which made its bourse debut in December in the biggest Swedish IPO since Ratos listed building products company Lindab in 2006, have outperformed the market by more than 20 percentage points to date.

Contract drug maker Recipharm, debt-collection company Lindorff and cable operator Com Hem are also considering IPOs, sources have told Reuters.

Sanitec, Swedish kitchen maker Nobia and Danish insulation materials business Rockwool, whose earnings also depend on the construction market, have enterprise values of about 10 times 2013 earnings before interest, tax, depreciation and amortisation (EBITDA).

The same multiple applied to Inwido would value it at around 4 billion Swedish crowns ($627 million) including debt.

Inwido, which employs about 3,000 people, had EBITDA of 407 million Swedish crowns in 2013 on sales of 4.3 billion, mostly in the Nordic region.

Ratos has owned Inwido since 2004, one of 18 holdings across the Nordics with combined sales of 42 billion crowns last year. ($1 = 6.3803 Swedish Crowns) (Reporting by Sven Nordenstam; Editing by Niklas Pollard and David Goodman)

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