EQT picks Goldman Sachs, ABG for XXL listing, say sources-Reuters

(Reuters) – Swedish private equity firm EQT has picked Goldman Sachs and ABG Sundal Collier to lead a stock market listing of Norwegian sporting goods and outdoor equipment chain XXL planned for this autumn, three people familiar with the matter said.

One of the people said a listing could value XXL at 9-10 billion Norwegian crowns ($1.46-1.62 billion) including debt. Another person said Credit Suisse, Sweden’s Carnegie and Norwegian bank DNB would also act as bookrunners.

XXL has said in job ad it is considering a stock market listing in the next three years, but gave no further details.

EQT, which owns a 65 percent stake in the fast-growing retailer, declined to comment. XXL did not immediately respond to a request for comment. The banks either declined to comment or did not respond to a request for comment.

XXL adds to a pipeline of sizeable Nordic listings planned for the second half of 2014, building on a strong start to the year for the region.

In the first six months of 2014, $4.8 billion worth of shares were sold in initial public offerings of Swedish, Danish, Norwegian and Finnish companies, up from just $712 million in the first half of 2013, making it the best six-month period for the region since the second half of 2010, according to Thomson Reuters data.

Denmark and Sweden made up the biggest part of the listings, with Danish outsourcing firm ISS and Swedish cable operator Com Hem topping the list. But for the second half, Norway’s IPO pipeline also contains some big firms.

Cable operator Get, which could be worth 14 billion crowns including debt, is preparing a listing as well, sources told Reuters in May. Also, the Norwegian state has picked advisors for a privatisation of real estate firm Entra, where an IPO is a possible exit route.

For XXL, an enterprise value (including debt) of 9 billion crowns would equal about 18 times 2015 forecast earnings after tax, corresponding to roughly twelve times forecast earnings before interest, taxes depreciation and amortisation (EBITDA), one of the people said.

That would mean a significant premium for XXL over most specialty retailers. The European sector trades at around 9 times forward EBITDA earnings, according to Thomson Reuters data.

XXL recorded 29 percent sales growth last year. The retailer had sales of 4.0 billion Norwegian crowns in 2013. Core earnings rose by 18 percent to 463 million.

The firm has 22 stores in Norway, 15 in Sweden and one in Finland according to its website. It employed 1,360 people at the end of 2013, more than double the 2010 number.