HOFFMAN ESTATES, Ill. — CDK Global, Inc. (Nasdaq: CDK), a leading retail technology company, has entered into a definitive agreement to be acquired by Brookfield Business Partners, together with institutional partners (collectively “Brookfield”), for a total enterprise value of $8.3 billion.
Under the terms of the merger agreement, Brookfield will commence a tender offer to acquire all of the outstanding shares of CDK. CDK shareholders will receive $54.87 per share in cash upon completion of the transaction, which represents a 30% premium to the unaffected closing price of CDK stock on Feb. 18, 2022, the last full trading day prior to market speculation regarding a potential sale of the company. The agreement was unanimously approved by CDK’s Board of Directors, which recommends that CDK stockholders tender their shares in the offer.
CDK shared the message below with its dealers about the news:
Dear Valued Customers,
This morning, we announced that CDK Global, Inc. has agreed to be acquired by Brookfield Asset Management, Inc., a leading global alternative asset manager. Following the transaction, which is expected to be completed in the third quarter of 2022, we will become a privately held company. I encourage you to read the press release we issued announcing the transaction.
This transaction will bring a number of benefits to our customers. As a private company, we will have greater agility to invest in innovation and pursue our long-term vision to connect our industry at every level and create an open and collaborative future. With Brookfield we will have the support, resources and insights to help accelerate our growth and more importantly to provide you, our customers, with even more innovative products and services to help you better serve your customers today and tomorrow.
Business will remain as usual here at CDK and your day-to-day relationship will not change. We will continue working together just as we do today, and you can expect the exact same commitment to strong service and high-quality products.
This is an important milestone for our company, and one we would not have reached without our customers. It’s been your confidence and faith in our operational ability, strategy and leadership that has fueled us to do -- and deliver -- more. We personally thank you for that loyalty and support, and we look forward to continuing to serve you for years to come.
“This transaction is an exciting next step for CDK that provides our shareholders with both certainty of value and a meaningful premium. It also allows CDK to continue executing our long-term strategy to connect our industry at every level and create an open and collaborative future,” said Brian Krzanich, president and chief executive officer, CDK Global. “In consultation with our outside advisors, CDK’s Board of Directors carefully evaluated a range of strategic and financial alternatives over several months and determined that this transaction is superior to all other available alternatives.
“Brookfield recognizes the unique value our products bring to more than 15,000 retail locations in North America and shares our vision of transforming the future of automotive retail. We are excited about the opportunity to further sharpen our focus on elevating the dealer and consumer experience when selling, buying or owning a vehicle. I am grateful for our team’s incredible work in providing an integrated experience —from sourcing to retail sale, and beyond.”
As the flagship listed vehicle of Brookfield Asset Management’s Private Equity Group, Brookfield Business Partners is focused on owning and operating high-quality businesses that provide essential products and services and benefit from a strong competitive position. Brookfield Asset Management is a leading global alternative asset manager with approximately $690 billion of assets under management.
The closing of the tender offer will be subject to certain conditions, including the tender of shares representing at least a majority of the total number of CDK’s outstanding shares, the expiration or termination of the antitrust waiting period, and other customary conditions, after which CDK’s common stock will no longer be listed on the Nasdaq Global Select Market. Following the successful completion of the tender offer, Brookfield will acquire all remaining shares not tendered in the tender offer through a second-step merger at the same price. This transaction is expected to close in the third quarter of 2022.
Morgan Stanley & Co. LLC is serving as exclusive financial advisor, and Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal advisor to CDK. Davis Polk & Wardwell LLP is acting as legal advisor to Brookfield.
Click here for more Industry News.