Nordic optical IPO’s fortune is tied to EssiLux

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Sunglasses from different brands are seen in Hanau near Frankfurt, Germany, March 18, 2016. REUTERS/Kai Pfaffenbach

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MILAN, Oct 20 (Reuters Breakingviews) - Glasses and lenses retailer Synsam is being suitably modest. The Scandinavian optician, which runs 490 stores, is listing its shares at between 46 and 56 Swedish crowns each. The top of that range gives a market value of 8.4 billion Swedish crowns, or close to $1 billion. Including debt, that’s roughly 9 times its projected 2022 EBITDA of 1.3 billion Swedish crowns, in line with Dutch retailer GrandVision (GVNV.AS), a rival in the hypercompetitive Nordic market.

Synsam hopes its well-oiled subscription model will expand annual sales by 12% and boost EBITDA margins to above 25%. Yet it’s not the only one in that game. Furthermore, $86 billion market leader EssilorLuxottica (ESLX.PA), which is buying GrandVision, is a worry. While eyewear distribution is fragmented, suppliers of glasses are harder to find. Even though Synsam sells some in-house models, Leonardo Del Vecchio’s giant is a major producer of lenses and branded frames. Where EssilorLuxottica goes, Synsam will likely follow. (By Lisa Jucca)

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Editing by Ed Cropley and Oliver Taslic

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