German perfume retailer Douglas plans Frankfurt IPO by end March

By Emma-Victoria Farr

FRANKFURT (Reuters) -Perfume retailer Douglas plans an initial public offering (IPO) on the Frankfurt Stock Exchange aiming to raise 800 million euros ($868 million), it said on Monday, in Germany's largest listing since Schott Pharma last September.

The share sale is due to be completed in the first quarter subject to capital market conditions. Germany's DAX stock index hit a record high on Friday.

Douglas is targeting 800 million euros in proceeds, with an additional equity injection of around 300 million euros from existing shareholders including CVC Capital Partners, the company said.

Proceeds will be used to reduce debt, while remaining loans will be refinanced at better conditions, it said.

Based on enterprise value, Douglas is being valued between 5.5 to 6.5 billion euros including debt, with around 20% of shares in free float, according to sources.

CVC and the Kreke family behind the business will not give up shares in the IPO, with CVC remaining majority shareholder, the intention to float document said.

Douglas was delisted from the stock exchange in 2013 after a joint takeover by financial investor Advent and the Kreke family. In 2015, the majority went to CVC for almost three billion euros.

"The Douglas Group is ideally positioned to further capitalise on the large and resilient European premium beauty market," CEO Sander van der Laan said in a statement, calling an IPO the "logical next step" in the company's growth strategy.

This would be the second listing in Germany this year following tank part manufacturer Renk's IPO in February. Renk's shares have risen from an issue price of 15 euros to 27 euros, in a positive signal for equity markets.

There are at least four other major IPOs pencilled in for the first half of the year in Europe, sources have told Reuters.

The prospective share sales come after a quiet two years for IPOs, as soaring debt costs and geopolitical uncertainty dampened sentiment towards new stock listings.

Douglas operates 1,850 perfume stores in 22 countries, but now does almost a third of its business online.

In its first quarter of this financial year which included Christmas, it posted a 13% rise in adjusted EBITDA to 348 million euros on sales up 8% to 1.56 billion euros.

By 2026, van der Laan wants to increase sales by an average of 7% per year to more than five billion euros.

The IPO is being arranged by Citi, Goldman Sachs, Deutsche Bank, Unicredit and UBS.

($1 = 0.9219 euros)

(Reporting by Emma-Victoria Farr, Alexander Huebner and Rachel More; Editing by Mrigank Dhaniwala)