Private equity firm Carlyle Group LP 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.

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