Summary
This Form 8-K filing by Automatic Data Processing, Inc. (ADP) details the completion of a significant corporate event: the spin-off of its Dealer Services business unit, which now operates as a separate, independent entity named CDK Global, Inc. The separation was executed through a distribution of CDK Global common stock to ADP's existing stockholders. This strategic move aims to allow each company to focus on its respective core business and unlock shareholder value. Key aspects of this transaction include the establishment of a Separation and Distribution Agreement outlining the transfer of assets, assumption of liabilities, and the operational independence of both ADP and CDK Global. The filing confirms the distribution date, the ratio of shares distributed, and the tax-free nature of the transaction for shareholders. Investors should note the implications of this divestiture on ADP's future financial performance and strategic direction, as well as the creation of a new publicly traded entity in CDK Global.
Key Highlights
- 1ADP has completed the spin-off of its Dealer Services business, which is now operating as a separate company, CDK Global, Inc.
- 2ADP stockholders of record as of September 24, 2014, received one share of CDK Global common stock for every three shares of ADP stock held.
- 3The distribution of CDK Global shares was made without any payment or exchange of shares by ADP stockholders.
- 4The spin-off is structured to be a tax-free distribution to ADP shareholders under Section 355 of the Internal Revenue Code.
- 5A Separation and Distribution Agreement governs the terms of the spin-off, including asset transfers, liability assumptions, and the operational separation of the two companies.
- 6Steven J. Anenen resigned as President, Dealer Services of ADP in connection with the spin-off.
- 7Unaudited pro forma financial information related to the spin-off is being furnished as an exhibit.