CDK Global Announces Entry into an Accelerated Share Repurchase Agreement to Repurchase $350 Million of its Common Stock
May 15 2017 - 8:30AM
CDK Global, Inc. (“CDK”) announced today its entry into an
accelerated share repurchase (“ASR”) agreement with Bank of America
Merrill Lynch (“BofAML”) to purchase $350 million of CDK’s common
stock. Under the terms of the ASR agreement, CDK will make a $350
million payment to BofAML on May 16, 2017 and will receive from
them on the same day an initial delivery of approximately 4.5
million shares of CDK’s common stock. The final number of shares to
be purchased will be based on the average of the daily
volume-weighted average price of CDK’s common stock during the term
of the ASR transaction, less a discount and subject to adjustments
pursuant to the terms and conditions of the ASR agreement. At
settlement, under certain circumstances, CDK may be entitled to
receive additional shares of CDK’s common stock from BofAML or,
under certain circumstances, CDK may be required to deliver shares
of common stock or to make a cash payment, at CDK’s election, to
BofAML. The final settlement of the transaction under the ASR
agreement is expected to occur during CDK’s fiscal quarter ending
September 30, 2017.
The ASR agreement contains customary terms for these types of
transactions, including the mechanisms to determine the number of
shares or the amount of cash that will be delivered at settlement,
the required timing of delivery upon settlement, the specific
circumstances under which adjustments may be made to the
transaction, the specific circumstances under which the transaction
may be cancelled prior to the scheduled maturity and various
acknowledgements, representations and warranties made by CDK and
BofAML, as applicable, to one another.
About CDK Global
With more than $2 billion in revenues, CDK Global (Nasdaq:CDK)
is a leading global provider of integrated information technology
and digital marketing solutions to the automotive retail and
adjacent industries. Focused on evolving the automotive retail
experience, CDK provides solutions to dealers in more than 100
countries around the world, serving approximately 28,000 retail
locations and most automotive manufacturers. CDK’s solutions
automate and integrate all parts of the dealership and buying
process from targeted digital advertising and marketing campaigns
to the sale, financing, insuring, parts supply, repair and
maintenance of vehicles.
Forward-Looking Statements
This press release and other oral statements made by CDK
management contain “forward-looking statements” within the meaning
of the Private Securities Litigation Reform Act of 1995. All
statements, other than statements of historical facts, including
any plans, objectives, forecasts, goals, beliefs, business
strategies, future events, business conditions, results of
operations, financial position and business outlook and business
trends, and other information, may be forward-looking statements.
Words such as “might,” “will,” “may,” “could,” “should,”
“estimates,” “expects,” “continues,” “contemplates,” “anticipates,”
“projects,” “plans,” “potential,” “predicts,” “intends,”
“believes,” “forecasts,” “future,” “assumes,” and variations of
such words or similar expressions are intended to identify
forward-looking statements. These statements are based on
management’s expectations and assumptions and are subject to risks
and uncertainties that may cause actual results to differ
materially from those expressed, or implied, by these
forward-looking statements.
Factors that could cause actual results to differ materially
from those contemplated by the forward-looking statements include:
CDK’s success in obtaining, retaining and selling additional
services to customers; the pricing of products and services;
overall market and economic conditions, including interest rate and
foreign currency trends, and technology trends; auto sales and
advertising and related industry changes; competitive conditions;
changes in regulation; changes in technology; security breaches,
interruptions, failures and other errors involving CDK’s systems;
availability of skilled technical employees/labor/personnel; the
impact of new acquisitions and divestitures; employment and wage
levels; availability of capital for the payment of debt service
obligations or dividends or the repurchase of shares; any changes
to CDK’s credit ratings and the impact of such changes on CDK’s
financing costs, rates, terms, debt service obligations, access to
capital market and working capital needs; the impact of CDK’s
indebtedness, access to cash and financing, and ability to secure
financing, or financing at attractive rates; CDK’s ability to
timely and effectively implement its transformation plan, which is
intended to increase operating efficiency and improve CDK’s global
cost structure, while limiting or mitigating business disruption;
and the ability of CDK’s significant stockholders and their
affiliates to significantly influence CDK’s decisions.
There may be other factors that may cause CDK’s actual results
to differ materially from the forward-looking statements. CDK’s
actual results, performance or achievements could differ materially
from those expressed in, or implied by, the forward-looking
statements. CDK gives no assurances that any of the events
anticipated by the forward-looking statements will occur or, if any
of them do, what impact they will have on its results of operations
and financial condition. You should carefully read the risk factors
described in CDK’s reports filed with the Securities and Exchange
Commission (“SEC”), including those discussed under “Part I, Item
1A. Risk Factors” in CDK’s most recent Annual Report on Form 10-K
and its most recent Quarterly Report on Form 10-Q for a description
of certain risks that could, among other things, cause CDK’s actual
results to differ from any forward-looking statements contained
herein. These filings can be found on CDK’s website at
www.cdkglobal.com and the SEC’s website at www.sec.gov.
All forward-looking statements speak only as of the date of this
press release even if subsequently made available by CDK on its
website or otherwise. CDK disclaims any obligation to update or
revise any forward-looking statements that may be made to reflect
new information or future events or circumstances that arise after
the date made or to reflect the occurrence of unanticipated events,
other than as required by law.
Investor Relations Contact:
Katie Coleman
847.485.4650
katherine.coleman@cdk.com
Media Contact:
David Webster
Aberdeen Strategies
469.222.3667
david.webster@aberdeenstrategies.com
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