Private equity firms Kohlberg Kravis Roberts & Co and General Atlantic are moving closer to a deal to buy Northrop Grumman's TASC unit, a source familiar with the situation said on Friday.
The defense contractor hired investment banks to sell the unit, which advises government military agencies, a few months ago, sources previously told Reuters.
A number of private equity firms have been interested in the unit, but KKR and General Atlantic are now likely to be the winner, the current source said.
Northrop, which has never confirmed it is selling the unit, declined comment. KKR and General Atlantic also declined comment.
The source, speaking to Reuters but who couldn't be identified because the deal is yet to be announced, said while a deal was getting closer, the situation remained fluid and a deal was not guaranteed. It was unclear what the price is likely to be.
Sources told Reuters in September that a sale, originally expected to fetch about $2 billion, would more likely be around $1.5 billion.
Bloomberg earlier reported that the pair could reach an agreement as soon as next week to buy the unit for $1.5 billion to $2 billion.
(Editing Bernard Orr)