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Showroomprive.com eyes $1 billion valuation in IPO

PARIS (Reuters) - French online fashion retailer Showroomprive.com IPO-SHOW.PA expects to have a market value of up to 870 million euros ($986 million) when it debuts on the Paris bourse next month, in a listing aimed at raising 50 million euros for expansion.

The company said on Monday existing shareholders including U.S. investment fund Accel Partners and Kilwa Investment would sell shares expected to be worth between 210 million and 293 million euros in the initial public offering (IPO).

U.S.-listed online discount retailer Vipshop Holdings VIPS.N has committed to buy a further 30 million euros of shares from the selling shareholders, making the total potential offer worth 373 million euros.

“Our group is well positioned to benefit from European consumers’ increasing use of the Internet and mobile for their fashion purchases,” co-Founders and Chief Executives David Dayan and Thierry Petit said in a statement.

Founded in 2006, Showroomprive.com sells designer fashion to its 20.2 million members at steep discounts in “flash” sales, a model pioneered by larger French rival Vente-Privee.com.

Showroomprive.com said it expected to sell shares between 19.50 euros and 26.30 euros apiece, giving it a market value of 660 million to 870 million euros. Vipshop will have a stake of between 2 and 4 percent.

The maximum proceeds of 293 million euros for selling shareholders from the public offer depends on the stock being sold at the top of the range as well as the exercise of a so-called over-allotment option to increase the size of the offer by 15 percent.

Net proceeds for the company of around 45 million euros will help fund international expansion and acquisitions.

Trading in the shares on Euronext Paris is due to start on Nov. 3.

Petit and Dayan, who own 60 percent of the stock, have said they will keep a majority stake.

Showroomprive.com had 2014 sales of 350 million euros and earnings before interest, tax, depreciation and amortization (EBITDA) of 16 million. It has achieved annual sales growth of 30 percent over the last three years.

The company is targeting sales of 435-450 million euros and EBITDA of 22-24 million this year. Revenue is expected to rise to 750 million by 2018 as the portion of international sales rises to 25 percent from 15 percent.

Already in seven European countries, notably Portugal and Italy, it plans soon to expand to Germany.

In March, a private placement of 10 percent of the group’s stock with Middle Eastern investors valued the company at 625 million euros.

Goldman Sachs GS.N and Deutsche Bank DBKGn.DE are joint global coordinators and joint bookrunners for the IPO. BNP Paribas BNPP.PA and Societe Generale SOGN.PA are joint bookrunners. Rothschild & Cie [ROT.UL] is financial adviser.

($1 = 0.8796 euros)

Reporting by James Regan, Pascale Denis and Dominique Vidalon; Editing by David Holmes and Mark Potter

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