Summary
Automatic Data Processing, Inc. (ADP) filed an 8-K on September 16, 2014, to announce a key decision regarding the previously disclosed spin-off of its Dealer Services business unit, which will operate as CDK Global, Inc. The Board of Directors has approved the share distribution ratio, a critical step towards finalizing the separation. Investors should note that shareholders of record as of September 24, 2014, will receive one share of CDK Global common stock for every three shares of ADP common stock they own after the market closes on September 30, 2014. This announcement marks a significant milestone in the strategic restructuring of ADP. The spin-off aims to allow ADP to focus on its core Employer Services business, while CDK Global will operate as an independent, publicly traded entity focused on the automotive retail technology sector. Investors holding ADP stock should understand the mechanics of this distribution, as it will directly impact their holdings and represent a tangible distribution of value from the company.
Key Highlights
- 1ADP's Board of Directors approved the share distribution ratio for the spin-off of CDK Global.
- 2CDK Global was formerly ADP's Dealer Services business unit.
- 3The spin-off will occur via a share distribution to ADP shareholders.
- 4Shareholders of record as of September 24, 2014, will be eligible to receive CDK Global shares.
- 5The distribution ratio is one share of CDK Global for every three shares of ADP held.
- 6The separation is anticipated to occur after market close on September 30, 2014.
- 7This filing includes a press release dated September 16, 2014, as an exhibit.