UPDATE 2-Trainline plans to raise $113 million through London IPO

(Corrects reference to shares sold in second paragraph)

* Stock market listing expected in February

* Firm targets dividend equivalent to 25 pct of profit

* CEO plans future European expansion

By Matt Scuffham and Andrew Winterbottom

LONDON, Jan 8 (Reuters) - Trainline, Britain's biggest online rail booking system and fifth-largest e-commerce platform, said on Thursday it intended to raise 75 million pounds ($113 million) through a listing on the London Stock Exchange in February.

The firm's private equity owners Exponent (NasdaqGS: EXPO - news) , Harbourvest Partners (Other OTC: PGPHF - news) and Northwestern Mutual Life Assurance will sell shares in the sale. The company will have a free float of at least 25 percent, Trainline said, and an over-allotment option of up to 15 percent of the total size of the offer could be made available by Exponent.

The company is looking at a valuation of over 500 million pounds ($753.2 million), a source familiar with the matter told Reuters.

"We're excited. We sit at the heart of the rail industry - our passenger numbers are up twofold since the 1990s, as railway continues to take share from road," said Clare Gilmartin, the company's chief executive officer.

The former eBay executive sees Trainline as a technology business at heart.

"Growth in the last few quarters has largely been driven by an acceleration in mobile sales; there's huge room to grow online and through mobile in the UK," she said.

While Gilmartin was coy on the subject of expanding its service offering beyond rail, she said the company was looking to Europe as its next growth market. It has already entered into deals with Deutsche Bahn and Trenitalia, is in discussions with other national operators and sees potential in expanding cross-border rail routes in Europe.

Trainline said that it would use the proceeds from the sale to pay off existing debt and settle bank costs and fees.

Adjusted core earnings (EBITDA) across Trainline's branded businesses grew to 21 million pounds in 2014, up from 14.3 million pounds in 2013.

The company said that it initially intended to target a total annual dividend payout equivalent to about 25 percent of its profit after tax following the listing and would target higher dividends thereafter.

Morgan Stanley (Xetra: 885836 - news) is leading the initial public offering (IPO). JP Morgan Cazenove and Numis are acting as joint bookrunners.

Established in 1999, Trainline was bought by Exponent in 2006 for about 160 million pounds from a consortium which included Virgin, Stagecoach and National Express (LSE: NEX.L - news) .

The business sells tickets for train travel in Britain online and by telephone. It allows its customers to choose routes and fares based on preferences such as price or time.

($1 = 0.6635 pounds) (Editing by Simon Jessop and Vincent Baby)