CDK World to be acquired by funding agency in $8.three billion deal

CDK Global Inc. mentioned it agreed to be acquired by funding agency Brookfield Enterprise Companions in a deal valued at $8.three billion that may take the publicly traded dealership software program large non-public.

The dealership administration system supplier based mostly in Hoffman Estates, Unwell., mentioned Thursday that Brookfield will buy all of CDK’s excellent shares, with CDK shareholders receiving $54.87 per share in money when the transaction closes, anticipated within the third quarter.

The worth would mirror a 30 p.c premium to CDK’s closing share worth on Feb. 18, which the corporate mentioned was the final full day of buying and selling earlier than market hypothesis started a couple of potential sale. CDK shares rose 11.three p.c to $54.51 in noon buying and selling.

Upon closing, CDK’s inventory now not can be publicly traded.

“This transaction is an thrilling subsequent step for CDK that gives our shareholders with each certainty of worth and a significant premium. It additionally permits CDK to proceed executing our long-term technique to attach our business at each stage and create an open and collaborative future,” CDK CEO Brian Krzanich mentioned in a press release. “In session with our exterior advisors, CDK’s board of administrators fastidiously evaluated a variety of strategic and monetary options over a number of months and decided that this transaction is superior to all different accessible options.”

Brookfield Business Partners is a unit of worldwide various asset administration agency Brookfield Asset Administration’s non-public fairness group.

“Brookfield acknowledges the distinctive worth our merchandise convey to greater than 15,000 retail areas in North America and shares our imaginative and prescient of reworking the way forward for automotive retail,” Krzanich mentioned. “We’re excited in regards to the alternative to additional sharpen our concentrate on elevating the supplier and client expertise when promoting, shopping for or proudly owning a car.”

CDK has expanded past its core DMS enterprise, which had 9,181 automotive buyer websites as of Dec. 31, into different dealership software program merchandise. In June, CDK acquired digital retailing provider Roadster for $360 million. Additionally final yr, CDK acquired Salty Dot Inc., an insurance coverage expertise firm that enables shoppers to purchase auto insurance coverage on the similar time they purchase a car.

CDK mentioned Morgan Stanley & Co. is its monetary adviser and Paul, Weiss, Rifkind, Wharton & Garrison is its authorized adviser. Davis Polk & Wardwell is authorized adviser to Brookfield Enterprise Companions.