The sources asked not to be identified because the matter is not public. Carlyle declined to comment while representatives for Illinois Tool Works, Onex and CPPIB did not immediately respond to requests for comment.
Illinois Tool Works announced in September it was initiating a process to sell the industrial packaging unit, as the conglomerate continues to streamline its diversified business lines.
The packaging business makes steel, plastic and paper products used for bundling, shipping and protecting transported goods, with brands including Signode, Strapex, Angleboard and Mima.
Seeking to avoid frothy auctions for companies as markets rallied, private equity firms have shown a strong appetite for large units being carved out of companies seeking to exit non-core businesses.
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Those deals involve the creation of new companies and are complex. Firms with experience in executing corporate carve-outs feel they have an edge in such situations.
Last month, Carlyle said it would acquire a clinical diagnostics unit from Johnson & Johnson for $4.15 billion.
This followed Carlyle's acquisition in February 2013 of DuPont's performance coatings business for $4.9 billion, and its $3.46 billion acquisition of United Technologies' Hamilton Sundstrand industrial unit in 2012, along with buyout firm BC Partners.
The New York Post reported earlier that Carlyle has won the auction for the packaging unit.