NEW YORK, May 16 (Reuters) - Private equity firm Roark

Capital is exploring a sale of Primrose Schools that could value

the U.S. education franchise at nearly $2 billion, including

debt, people familiar with the matter said on Thursday.

Roark has tapped boutique investment bank R. W. Baird to

launch a sale process for Atlanta, Georgia-based Primrose, the

sources said, requesting anonymity as the discussions are

confidential.

Primrose, which was acquired by Roark in 2008 and is one of

the largest early childhood education franchises in the country,

operates more than 500 schools in over 35 states that provide

education and care to children and families.

The first Primrose school was opened in 1982 in Georgia.

Each school is independently owned and operated by franchise

operators.

In 2024, Primrose expects to generate around $85 million of

earnings before interest, taxes, depreciation and amortization

(EBITDA) and $120 million of revenue, the sources said, adding

that Roark is hoping to command a valuation for the company

equivalent to more than 20 times its EBITDA.

Baird declined to comment. Primrose and Roark did not

immediately respond.

Franchise-operated companies typically command high

multiples from private equity buyers who like to bet on

businesses that generate steady royalty fees. Last month,

Blackstone agreed to buy restaurant franchise Tropical Smoothie

Cafe for about $1.7 billion.

In 2022, private equity firm Sycamore Partners acquired

Goddard Systems - another early education franchise with over

600 schools - for an undisclosed amount. In 2018, Golden Gate

Capital bought early education franchise the Learning

Experience, which has over 350 centers across the U.S. and the

U.K.

Atlanta, Georgia-based Roark, which has $38 billion in

assets under management, owns several franchise businesses

across industries, including sandwich chain Subway, fitness

chain Orange Theory and restaurant chain Arby's.