Carlyle Group LP and KKR & Co are among the private equity firms in talks to acquire 2013's worst-performing medical services provider in Brazil, Fleury SA, according to three people familiar with the deal. The unnamed sources also said the acquisition may be valued at over BRL2.9 billion ($1.2 billion), wrote Bloomberg.

Apax Partners LLP and Gavea Investimentos Ltda have also eyed the Sao Paulo-based firm, the three sources said. However, Gavea is not big enough to take over Fleury without partnering with another entity, the report explained.

Fleury did not achieve analysts' earnings estimates for 12 quarters until September. The troubled firm is seeking to cut costs amid rising competition from hospitals and laboratories. A December 15 report made by Votorantim Corretora de Titulos e Valores Mobiliarios Ltda said more sluggish growth in the medical diagnostic business and inability to throw higher costs to clients pose risks to the industry, the report said.

Any acquirer of the Brazilian healthcare provider may be forced to take Fleury private. Under the bylaws of the company, stockholders are entitled to the full price paid to controlling stakeholders in the event of change in controlling hands, Bloomberg reported.