The company is looking to sell its HireRight unit which does background checks for private sector employers, said Reuters.
The business has drawn interest from private equity companies and the sale process is currently advancing into the second round.
A successful disposal of HireRight could help the company reduce its debts as its revenues decline amid government spending cuts, the report noted.
The unit has an EBITDA of $95m and could be sold for ten times the amount, said one of the sources.
Providence bought Altegrity for $1.5bn from Carlyle and Welsh, Carson, Anderson & Stowe in 2007.
The firm is reportedly preparing to close its seventh fund on $5bn, well below its original $8bn target.
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