CDK Global to be acquired by Brookfield for $8 billion
HOFFMAN ESTATES - CDK Global Inc., a company that provides management software solutions to automotive dealerships, has entered into a definitive agreement to be acquired by Brookfield Business Partners, together with its institutional partners, for a total enterprise value of $8.3 billion, it said Thursday.
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, 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.
"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 advisers, 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, the company said in a news release.
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 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.