NEW YORK (CNNMoney.com) -- Freescale Semiconductor is close to a deal to be taken private in a $16 billion leveraged buyout that would be the largest ever in the nation's technology sector, news reports said Monday.

The New York Times reported that Freescale Semiconductor (Charts), a former unit of Motorola, was in talks late Sunday to be acquired by a group of investment firms including Texas Pacific Group, Blackstone Group and Permira.

Reuters, citing people familiar with the matter, said another group, including Apax Partners, Bain Capital, Kohlberg Kravis Roberts & Co. and Silver Lake Partners, was also bidding, adding that two people said this group was in the lead.

Freescale, whose stock soared about 20 percent on the news, confirmed talks with "parties relating to a possible business transaction" but also added "there can be no assurances that any transaction will result from these discussions."

The company did not identify the bidding groups.

Freescale makes specialized, or "embedded," chips that provide intelligence for products as varied as automotive engines and cell phones. In July it began commercial shipments of the first magnetic random-access memory (MRAM) chips that Fortune magazine reported will eventually allow digital cameras to store a picture without any delay and let laptop computers turn on like a light.

Motorola (Charts), which still accounted for 27 percent of Freescale's sales in 2005, according to its 10-K filing, announced plans to spin off the unit in late 2003. Its shares started trading July 2004 with an initial offering price of $13. Shares closed Friday at $30.75, up 137 percent from the offering price, giving it a stock market worth of only $4.2 billion.

Freescale is one of largest stand-alone makers of embedded chips, making it an attractive target to private equity firms looking to enter the sector. Among its competitors are units of Royal Philips Electronics (Charts), STMicroelectronics (Charts) and Texas Instruments (Charts).

Two other leading investment firms, Kohlberg Kravis Roberts & Co. and Silver Lake Partners, submitted an 11th-hour offer for Freescale, according to the Times report, but it appears that the bid may have been too low and too late.

A spokeswoman for Freescale did not return a call from the paper seeking comment. Spokesmen for the consortium either declined to comment or could not be reached, the Times reported.

The $11.3 billion sale of SunGard Data Systems in 2005 is the largest leveraged buyout in the tech sector to date, according to the paper, but the bidding for Freescale is a sign of the increased appetite of private equity firms for technology companies that they formerly shunned due to concerns that the sector was too volatile.

(Correction: An earlier version of this article incorrectly stated that Motorola still owned a stake in Freescale. CNNMoney.com regrets the error.)

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