* IPO expected to raise up to $372 mln
* Offering of 21.9 mln shares at $15-$17/shr
* To list on the New York Stock Exchange (Adds analyst comment, details, industry background)
By Neha Dimri
April 6 (Reuters) - Party City Holdco Inc, the largest U.S. party goods retailer, is expected to be valued at nearly $2 billion in its initial public offering, the first by a U.S. retailer this year.
The company, backed by buyout firm Thomas H. Lee Partners LP, operates 900 party superstores in the United States and Canada that sell party supplies including paper and plastic tableware, metallic and latex balloons and gifts for everyday.
Specialty retailers are successfully competing with online retailers because of the in-store experience they offer, said Jay Ritter, a professor and IPO expert at the University of Florida.
People prefer to shop at a specialty store like Party City mostly because it offers products with unique party themes, which can be tailor-made for an event, Ritter said.
Party City reported an 11 percent rise in revenue to about $2.27 billion for the year ended Dec. 31. Net income jumped to $56.1 million from $4.2 million, a year earlier.
IPO activity in the United States has been off to a slow start this year, with the number of first-quarter deals falling to their lowest level since 2010.
Etsy Inc, which operates a website that sells handmade goods and craft supplies, is expected to raise about $267 million in its IPO next week.
Founded in 1947, Party City said it expects the offering of 21.9 million shares to be priced at between $15 and $17 per share, raising up to $372 million.(bit.ly/1MXcT8W).
The company has grown through acquisitions of Party City, Party America Corp, Factory Card & Party Outlet, Party Packagers and iParty Corp.
Party City had debt of about $2.18 billion as of Dec. 31.
The company, which operates in the $10 billion retail party goods industry, said it expects to open about 30 stores each year in the United States and Canada, starting this year.
Thomas H. Lee acquired a majority stake in Party City in a $2.69 billion deal from private equity peers Advent International Corp, Berkshire Partners LLC and Weston Presidio in 2012. Thomas H. Lee currently holds about 69 percent stake, while Advent has about 24 percent interest in the company.
Goldman Sachs, Merrill Lynch, Pierce, Fenner & Smith, Credit Suisse and Morgan Stanley are lead underwriters to the offering.
The company, which filed for the IPO last year, intends to list under the symbol “PRTY” on the New York Stock Exchange. (Editing by Maju Samuel)