Carlyle seeks buyer for Diversified Machine-sources

* Business could be worth about $400 mln-$500 mln -sources

* Carlyle formed Diversified Machine in 2005

* Evercore running sale of Diversified Machine -sources

By Soyoung Kim

NEW YORK, Aug 8 (Reuters) - The Carlyle Group is seeking a buyer for auto parts supplier Diversified Machine Inc and the business may fetch more than $400 million for the private equity firm, people familiar with the matter said.

Diversified Machine Inc, formed by Carlyle in 2005, is a precision machining company that makes chassis and powertrain components and modules for automakers and parts suppliers.

Investment bank Evercore Partners (EVR.N) is running the auction process, the people said.

Carlyle formed the company by acquiring all of the assets of UniBoring out of bankruptcy in November 2005, and renamed it Diversified Machine Inc (DMI). It added aluminum and iron casting capabilities over the last six years through several acquisitions, including buying assets from once-bankrupt auto parts suppliers such as Hayes Lemmerz and Metaldyne.

Howell, Michigan-based Diversified Machine's customers include General Motors Co (GM.N), Ford Motor Co (F.N) and TRW Automotive (TRW.N). The company has about $60 million in annual earnings before interest, tax, depreciation and amortization (EBITDA), one of the people said.

Representatives for both Carlyle and Evercore declined to comment.

Diversified Industrials is among a number of formerly bankrupt auto industry assets that have gone on the auction block or tapped markets for an initial public offering this year as vehicle sales recover from pre-recession lows.

(Reporting by Soyoung Kim; editing by Gunna Dickson)