* Intention to float seen coming within weeks - sources
* Nordea tipped to manage retail sale - source
* Some valuations as high as $5.1 bln - source
By Ole Mikkelsen
COPENHAGEN, Aug 27 (Reuters) - Danish jewellery maker Pandora’s owners are preparing an initial public offering of stock and are likely to unveil their flotation plans within weeks, investment banking sources close to the matter said.
Pandora, established as a Copenhagen jeweller’s shop in 1982, has grown rapidly over the past decade into an international company with manufacturing in Thailand and 2009 sales of 3.46 billion Danish crowns ($590 million).
Pandora Holding A/S reported this month a 105 percent increase in six-month sales to 2.58 billion crowns and a 41 percent rise in operating profit to 892 million, and said it expected growth to continue in the second half of the year.
“With the half-year report, they are clear for a listing, and the intention to float can be forthcoming soon,” one investment banker close to the deal said.
Nikolaj Vejlsgaard, partner at private equity investment firm Axcel which holds 59.3 percent of Pandora, told Reuters: “We never really comment on our plans for exiting (an investment).”
But the Pandora board member added that, like Axcel’s holdings in other companies, its stake in Pandora would eventually be for sale:
“We are not long-term owners, being a private equity fund,” Vejlsgaard said. “We are happy with the company. It is a good investment, and we are happy with its development.”
Another banking source said Nordea NDA.ST NDA.CO, which financed Axcel’s purchase of its majority stake in Pandora in 2008, would manage the retail part of the stock offering.
Foreign investment banks would run the sale to institutional investors, he added.
The first source said some estimates of the market value of Pandora were as high as 14-15 times earnings before interest, tax, depreciation and amortisation (EBITDA), but he said that was probably too high a multiple.
Pandora’s EBITDA was 1.02 billion crowns in the first half of the year, up 56 percent. Assuming an only flat development in the second half, 2010 EBITDA could exceed 2 billion crowns which on a multiple of 14-15 times would value it at 28-30 billion crowns ($4.78 billion - $5.12 billion).
He said a multiple of 11 times EBITDA would be more realistic, and he compared Pandora to better-known U.S. and UK jewellery industry peers such as Zale ZLC.N, Blue Nile NILE.O, Signet Jewelers SIG.L and Saks SKS.N, which he said traded at 8-13 times expected EBITDA.
A third source said this week that Pandora has appointed banks to handle the IPO. Pandora’s international breakthrough has depended heavily on its charm bracelets. Its charms and silver and gold charm bracelets accounted for 86 percent of total revenue in the first six months of the year and continued to grow rapidly.
“Pandora has shown itself to be resilient to the economic crisis, but fashion can be unpredictable,” one banker said. “No one knows how long there will be demand for their big-selling charms.”
A listing and stock offering for Pandora would represent a further thawing of the Danish IPO market after food ingredients maker Chr. Hansen (CHRH.CO) rejoined the bourse in June.
Other Danish commpanies seen waiting in the wings for large stock offerings include cleaning services giant ISS and telecom operator TDC TDC.CO, which is listed but 87.9 percent owned by private equity investment firms. (Reporting by Ole Mikkelsen; Additional reporting by Mia Shanley in Stockholm; Editing by Michael Shields)