Together with institutional partners, Brookfield Business Partners is acquiring CDK Global Inc. (Nasdaq: CDK), an automotive RV dealership technology company, for $8.3 billion, as per a report.
Brookfield will launch an offer to purchase all outstanding CDK shares following the merger agreement.
CDK holders will get $54.87 per share in cash upon deal completion, representing a 30% premium to the unaffected closing CDK stocks on February 18, 2022, the last full day of trading before market speculation regarding the potential sale of the company.
The agreement was unanimously approved by the CDK Board of Directors, which suggests that CDK stockholders tender their shares in the offer.
“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,” stated Brian Krzanich, president and chief executive officer of CDK Global.
“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,” Krzanich added.
“Brookfield recognizes the unique value our products bring to more than 15,000 retail locations in North America and shares our vision of transforming the future of automotive retail. We are excited about the opportunity to further sharpen our focus on elevating the dealer and consumer experience when selling, buying, or owning a vehicle. I am grateful for our team’s incredible work in providing an integrated experience–from sourcing to retail sale, and beyond,” he added.
The tender offer closure is subject to certain conditions, which include the tender of shares that represent at the very least a majority of the total number of outstanding CDK shares, as well as the expiration or termination of the antitrust waiting period, and any other customary conditions, after which, CDK’s common stock will no longer be listed on the Nasdaq Global Select Market.
After successfully completing the tender offer, Brookfield will acquire all the remaining shares not tendered in the tender offer via a second-step merger at the same price. This transaction is anticipated to close in the third quarter of 2022.