* Largest producer of retailer-branded diapers in Europe
* Aims for dividend of 35 to 40 pct of net profit, from 2015
* Revenues up 7.2 pct per year on average over past 10 yrs (Adds details on dividend policy, growth, management comments)
By Robert-Jan Bartunek
BRUSSELS, June 11 (Reuters) - Belgian diaper maker Ontex plans to raise up to 620 million euros ($844 million) in one of Europe's biggest new stock market listings this year to cut its debt and allow its private equity owners to cash in part of their investment.
Ontex said the listing on Euronext's Brussels stock exchange later this month would offer investors growth from emerging countries' take-up of its diapers and feminine care products and an expanding market for adult incontinence in the West.
The number of initial public offerings (IPOs) in Europe has picked up in recent months, spurred by the improving economic outlook, prompting investors to get more choosy about where they put their money.
About half of Ontex's revenue comes from diapers, a third from adult incontinence products and 13 percent from feminine care.
Ontex said it expected this mix to remain broadly stable, as it entered emerging markets with higher birth rates, while ageing western Europe would need more incontinence products.
"Once you start to use them you don't stop until the last day of your life. It's a growing opportunity building like a snowball," said Chief Executive Charles Bouaziz.
The company, which makes most of its money supplying retailers such as Tesco, Carrefour and Aldi with store-label products, also said it saw 50 percent as a benchmark share of the overall market for private label producers.
"If you just project countries like France or Germany and some of the Western European countries to get to (Denmark's 50 percent) level that provides us with a terrific growth opportunity," Bouaziz said.
Ontex's revenues have risen 7.2 percent on average per year in the decade until 2013 and it is the largest maker of retailer-branded diapers and feminine care products in Western Europe, nearly three times bigger in this category than its closest competitor, Swedish company Svenska Cellulosa (SCA) .
"Growth for baby diapers and feminine care is low in the western world, but that's not the case for adult incontinence," said Nordea analyst Stellan Hellstrom, who follows SCA. "The branded products offer higher margins, although there's been more growth in private labels."
Ontex's listing will give it an enterprise value of between 1.74 and 1.94 billion euros. Private equity firm TPG and Goldman Sachs acquired Ontex in 2010 for a reported enterprise value of 1.2 billion euros.
The flotation, at 16.50-20.50 per share, will raise 583-620 million euros from selling 19.7 million new shares and 7 million existing shares by the former management and Whitehaven B, an investment vehicle controlled by TPG and Goldman.
Whitehaven B would continue to hold at least 45.8 percent of Ontex even if high demand triggered an over-allotment option.
Ontex said it expected to raise a net 278 million euros, which would be used to cut its debt, which totalled 862 million euros on March 31.
The company had adjusted core earnings (EBITDA) of 173.6 million euros last year. An enterprise value of 1.94 billion euros would give the firm a valuation of 11.2 times earnings.
For Kimberly-Clark, which makes the Huggies brand of diapers, that ratio is 10.6 times, while for Svenska Cellulosa, which also has pulp and paper businesses, it is 9.4 times.
The IPO, with listing due by June 25, is being led by Bank of America Merrill Lynch, Goldman Sachs and UBS , with JP Morgan as a joint international bookrunner. TPG Capital, is international co-manager and Belgium's KBC Securities and Petercam are joint lead managers. ($1 = 0.7345 Euros) (Additional reporting by Steve Slater and Freya Berry in London; Editing by Erica Billingham)