By Abigail Summerville
NEW YORK (Reuters) – Non-public fairness agency Roark Capital is exploring a sale of Primrose Faculties that might worth the U.S. training franchise at practically $2 billion, together with debt, individuals acquainted with the matter stated on Thursday.
Roark has tapped boutique funding financial institution R. W. Baird to launch a sale course of for Atlanta, Georgia-based Primrose, the sources stated, requesting anonymity because the discussions are confidential.
Primrose, which was acquired by Roark in 2008 and is likely one of the largest early childhood training franchises within the nation, operates greater than 500 faculties in over 35 states that present training and care to kids and households.
The primary Primrose college was opened in 1982 in Georgia. Every college is independently owned and operated by franchise operators.
In 2024, Primrose expects to generate round $85 million of earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA) and $120 million of income, the sources stated, including that Roark is hoping to command a valuation for the corporate equal to greater than 20 occasions its EBITDA.
Baird declined to remark. Primrose and Roark didn’t instantly reply.
Franchise-operated corporations usually command excessive multiples from personal fairness patrons who wish to guess on companies that generate regular royalty charges. Final month, Blackstone (NYSE:) agreed to purchase restaurant franchise Tropical Smoothie Cafe for about $1.7 billion.
In 2022, personal fairness agency Sycamore Companions acquired Goddard Techniques – one other early training franchise with over 600 faculties – for an undisclosed quantity. In 2018, Golden Gate Capital purchased early training franchise the Studying Expertise, which has over 350 facilities throughout the U.S. and the U.Okay.
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Atlanta, Georgia-based Roark, which has $38 billion in belongings below administration, owns a number of franchise companies throughout industries, together with sandwich chain Subway, health chain Orange Concept and restaurant chain Arby’s.
