CDK Global Inc. (NASDAQ: CDK) is up 10% after the automotive retail tech company signed a definitive agreement to be purchased by Brookfield Business Partners with institutional investors for $8.3 billion.
Brookfield to acquire all outstanding CDK shares
Brookfield will launch a tender proposal to buy all of CDK’s outstanding shares under the provisions of the proposed merger. On consummation of the deal, CDK stockholders will earn $54.87 for each share in cash, representing a 30% premium over the unaltered trading price of CDK shares on February 18, 2022, the last complete trading day before market speculation about a prospective sale of the firm. CEO and President Brian Krzanich said:
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.
CDK’s Board of Directors unanimously accepted the agreement, proposing that CDK shareholders tender their outstanding shares in the proposal. Krzanich added:
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.
He explained that Brookfield understands the unique value CDK Global’s products deliver to over 15,000 retail locations across North America. The company is looking forward to focusing even more on improving consumer and dealer experience while selling, purchasing, or owning a car.
Brookfield Asset Management has $690 billion in assets under management
Brookfield Business Partners, the principal listed entity of Brookfield Asset Management’s Private Equity Group, is dedicated to owning and running high-quality enterprises that provide essential solutions and enjoy a competitive advantage. With about $690 billion in assets under management, Brookfield Asset Management is a significant worldwide alternate asset manager.
The transaction is likely to close in Q3 2022. The deal will close subject to certain conditions that include tendering shares representing a majority of the total available CDK outstanding shares, termination or expiration of antitrust waiting time, and other closing conditions. After closing, CDK common shares will not be listed on the Nasdaq Global Select Market anymore.
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