Private equity firm GTCR LLC is exploring a potential sale of Capella Healthcare, a hospital operator that may be valued at a little less than $1 billion, two people familiar with the matter said on Wednesday.

The Chicago-based buyout firm GTCR has hired Bank of America Merrill Lynch to seek a buyer and is in conversations with larger hospital operators about a deal, according to the people, who wished to remain anonymous because they are not permitted to speak to the media.

Calls to Capella, GTCR and Bank of America were not immediately returned.

The company could be valued at between $800 million and $1 billion in a sale, the sources said.

GTCR first invested in Capella in 2005, according to Capella's website. The company operates 14 hospitals in rural areas of the United States including Arkansas and Tennessee.

The sale process is still in the early stages, according to one of the sources.

Brentwood, Tennessee-based Lifepoint Hospitals Inc , Franklin, Tennessee-based IASIS Healthcare and Scottsbluff, Nebraska-based Regional Care Inc are all expected to consider bidding for the Capella, said one of the sources.

Calls to Regional Care, Lifepoint and IASIS were not immediately returned.

(Reporting by Soyoung Kim and Jessica Toonkel in New York; editing by Gary Hill and Matthew Lewis)