The Carlyle Group LP (NASDAQ:CG) agreed to buy the industrial packaging unit of Illinois Tool Works Inc. (NYSE:ITW) for $3.2 billion, the companies said Thursday. The sale is a result of ITW’s decision in September to shed its Industrial Packaging unit to focus on its core businesses.

Carlyle Group, a private equity firm based in Washington, has a long record of acquiring noncore companies from conglomerates and turning them around into profitable ventures. In the auction held for ITW’s packaging unit, Carlyle prevailed over a Canadian consortium of Onex Corp. (TSE:OCX) and the Canada Pension Plan Investment Board, which oversees about 192.8 billion Canadian dollars (US$179 billion) in assets. 

The money from the sale will be used to finance ITW’s share repurchase program of 50 million shares by the end of 2014. The transaction was assisted by J.P. Morgan Securities LLC (NYSE:JPM) and Goldman Sachs & Co. (NYSE:GS), ITW said in a statement.

“The Industrial Packaging business is an industry leader with a strong management team and highly dedicated people. We thank them all for their many contributions to ITW and know they will continue to thrive as an investment of the Carlyle Group,” Scott Santi, ITW president and chief executive, said in a statement.

The industrial packaging segment generated sales of $2.4 billion, or about 14 percent of the company’s revenue, in 2012.  It has about 7,000 employees at its 130 locations worldwide. 

ITW, based in Glenview, Ill., manufactures specialized industrial equipment and consumables with operations focused on the automotive and construction sectors in 58 countries. IPG, the packaging unit, serves the shipping and transportation industries and has 88 manufacturing locations serving 45 countries.

“IPG is a highly diversified business with strong management, attractive market positions and excellent free cash flow. We will leverage Carlyle’s global network to support the company’s growth, and we look forward to helping IPG achieve its full potential as it transitions to a standalone company,” Carlyle Managing Director Brian Bernasek said in a statement.