* Varta to sell new shares worth 150 mln eur
* Owner Montana Tech to offer shares worth up to 100 mln -source
* Varta targets free float of 40 pct post IPO (Adds details on offer size)
By Arno Schuetze
FRANKFURT, Sept 27 (Reuters) - Germany's Varta has revived plans for an initial public offering (IPO) in Frankfurt, the battery maker said on Wednesday, as it seeks funds to expand production.
The company said it plans to sell new shares worth 150 million euros ($177 million), as well as additional shares from its owner, Swiss investor Montana Tech Components.
According to two people close to the matter, Montana plans to sell shares worth 50-100 million euros.
Varta said it targeted a free float of around 40 percent.
It cancelled previous IPO plans last November, citing an unfavourable market environment.
"Our everyday devices are getting smaller and wireless. It leads to strong demand for small batteries with high energy density and reliability," Chief Executive Herbert Schein said in a statement.
Montana will remain the majority owner after the flotation, which is expected to value the largely debt-free company at more than 500 million euros in the late October float.
Varta is hoping to attract a valuation similar to that of hearing aid makers such as Sonova, William Demant , GN Store or Amplifon, which trade at an average of 16 times their expected core earnings.
Varta reported earnings before interest, taxes, depreciation and amortisation of 23 million euros on sales of 120 million in the first six months of 2017, having grown by more than 10 percent annually since 2013.
In 2002, its car battery business was taken over by Johnson Controls and the household batteries unit was merged with U.S. firm Rayovac, now called Spectrum Brands.
The Varta microbattery business was snapped up by Montana in 2007.
Berenberg is advising on the IPO, along with Unicredit.
$1 = 0.8492 euros Additional reporting by Hans Seidenstücker; Editing by Louise Heavens and Jason Neely