Private equity firm Carlyle Group is exploring a sale or initial public offering of Ortho-Clinical Diagnostics Inc, a U.S. diagnostics company that could be valued at more than $7 billion, including debt, people familiar with the matter said.

A divestment of Ortho-Clinical Diagnostics, which Carlyle acquired from Johnson & Johnson in 2014 for $4 billion, would show how buyout firms can turn unloved businesses of major corporations into lucrative investments within a few years.

Carlyle has hired investment banks to run a sale process for Ortho-Clinical, the sources said this week. Carlyle may also pursue an IPO of the company if the offers it receives do not meet valuation expectations, the sources added.

The sources asked not to be identified because the deliberations are confidential.

Carlyle declined to comment. Ortho-Clinical Diagnostics did not respond to a request for comment.

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