Groupon Inc is seeking an initial public offering valuation of about five times its projected 2012 sales, a source familiar with the situation said on Tuesday.
The offering would value Groupon at 11 times estimated 2013 earnings before interest, tax, depreciation and amortization (EBITDA) of just under $1 billion, the source said.
On Friday, Groupon unveiled plans to raise as much as $540 million in an initial public offering, less than previously planned, as it grapples with a weak equities market, executive departures and questions about its accounting and business model.
The daily deals website aims to sell 30 million shares, or less than 5 percent of the company, at between $16 and $18 each, according to a regulatory filing on Friday.
Earlier this month, the Chicago-based company reported third-quarter net revenue of $430.2 million.
The company, which competes with Google Inc and Amazon.com Inc declined to comment.
The news was first reported by Bloomberg. (Reporting by Saqib Iqbal Ahmed in Bangalore and Clare Baldwin in New York)