CDK Global, Inc. (Nasdaq: CDK) ("CDK" or the “Company”), a leading
automotive retail technology company, today announced that it has
commenced tender offers (the “Tender Offers”) to purchase for cash
any and all of its issued and outstanding 4.500% Senior Notes due
2024 (the “2024 Notes”), 4.875% Senior Notes due 2027 (the “2027
Notes”) and 5.250% Senior Notes due 2029 (the “2029 Notes” and,
together with the 2024 Notes and the 2027 Notes, the “Notes”). In
conjunction with the Tender Offers, CDK is soliciting consents (the
“Solicitations”) to the adoption of proposed amendments to each of
the indentures governing the Notes (together, the “Indentures”) to,
among other things, eliminate any obligation to make a Change of
Control Offer (as defined in the applicable Indenture),
substantially all of the other restrictive covenants and certain
events of default and other provisions (the “Proposed Amendments”).
The pricing terms for the Tender Offers and
Solicitations are set forth below.
CUSIP Nos. |
ISIN Nos. |
Outstanding Principal Amount |
Title of Security |
Purchase Price(1)(2) |
Consent Payment (1)(2) |
Total Consideration(1) |
12508EAD3 |
US12508EAD31 |
|
$500,000,000 |
4.500% Senior Notes due 2024(3) |
|
$1,006.25 |
|
$30.00 |
|
$1,036.25 |
12508EAF8 |
US12508EAF88 |
|
$600,000,000 |
4.875% Senior Notes due 2027 |
|
$982.50 |
|
$30.00 |
|
$1,012.50 |
12508EAJ0U12227AD3 |
US12508EAJ01USU12227AD34 |
|
$500,000,000 |
5.250% Senior Notes due 2029 |
|
$982.50 |
|
$30.00 |
|
$1,012.50 |
(1) Per $1,000 principal amount of Notes
and excluding Accrued Interest (as defined below), which will be
paid in addition to the Total Consideration or Purchase Price, as
applicable, up to the payment
date.(2) Included in Total
Consideration.(3) Original interest rate.
Pursuant to the terms of the 2024 Notes, the interest rate adjusts
from time to time and is currently 5.000%.
CDK is undertaking the Tender Offers and the
Solicitations in connection with the Agreement and Plan of Merger,
dated as of April 7, 2022, by and among Central Parent LLC, a
Delaware limited liability company (the “Acquiror”), Central Merger
Sub Inc., a Delaware corporation and wholly owned subsidiary of the
Acquiror (“Merger Sub”), and the Company, as amended from time to
time, pursuant to which Merger Sub will be merged with and into
CDK, with CDK surviving such merger as a wholly-owned subsidiary of
the Acquiror (such transaction, the “Acquisition”). The Acquiror is
an affiliate of Brookfield Asset Management Inc. and Brookfield
Capital Partners VI L.P. CDK anticipates that the Acquisition will
be completed in the third quarter of 2022. Neither the completion
of the Tender Offers nor the adoption of the Proposed Amendments is
a condition to the consummation of the Acquisition or to the
financing of the Acquisition. For more information regarding the
Proposed Amendments, please refer to the Offer to Purchase and
Consent Solicitation Statement, dated April 20, 2022.
Each Tender Offer is currently scheduled to
expire at 12:00 midnight, New York City time, at the end of the day
on May 17, 2022, unless extended (such time and date, as the same
may be extended with respect to a Tender Offer, the "Expiration
Date"). Holders of Notes must validly tender (and not validly
withdraw) their Notes and validly deliver (and not validly revoke)
their corresponding consents at or prior to 5:00 P.M., New York
City time, on May 3, 2022, unless extended (such time and date, as
the same may be extended with respect to a Tender Offer, the
"Consent Time"), to be eligible to receive the Total Consideration
per $1,000 principal amount of Notes tendered, which includes a
Consent Payment per $1,000 principal amount of Notes tendered, as
set forth in the table above. Holders who tender their Notes after
the applicable Consent Time and on or prior to the applicable
Expiration Date will be eligible to receive the Purchase Price per
$1,000 principal amount of Notes tendered set forth in the table
above, but not the Consent Payment. The Total Consideration
(including the Consent Payment) will only be payable to holders of
Notes who validly tender and do not validly withdraw their Notes,
and who validly deliver and do not validly revoke the corresponding
consent at or prior to the applicable Consent Time, and whose Notes
are accepted for purchase. Tendered Notes may be withdrawn and
consents may be revoked at or prior to the earlier of the
applicable Consent Time and such time and date as we receive the
applicable Requisite Consent (as defined below) (such time and
date, as the same may be extended with respect to a Tender Offer,
the "Withdrawal Deadline") but may not thereafter be withdrawn or
revoked. CDK may extend the Consent Time for a Tender Offer without
extending the Withdrawal Deadline for such Tender Offer. A holder
of Notes cannot deliver a consent without tendering its
corresponding Notes or tender its Notes without delivering a
corresponding consent.
Consummation of the Acquisition will constitute
a Change of Control under each Indenture, which will result in a
Change of Control Triggering Event (as defined in the applicable
Indenture) with respect to a series of Notes if a Rating Event (as
defined the applicable Indenture) with respect to such series of
Notes also occurs. CDK believes that it is likely that a Rating
Event will occur with respect to each series of the Notes in
connection with the Acquisition, which would result in a Change of
Control Triggering Event upon the consummation of the Acquisition.
Following a Change of Control Triggering Event, each Indenture
requires CDK to make a Change of Control Offer to purchase for cash
all of the outstanding applicable Notes validly tendered by any
holder upon the terms described in such Indenture, including at a
price equal to 101% of the principal amount of the applicable
Notes, plus accrued and unpaid interest, if any, to the purchase
date. If a Tender Offer is consummated and the Proposed Amendments
become operative, the Notes subject to such Tender Offer that
remain outstanding will not benefit from any of the restrictive
covenants that are eliminated by the adoption of the Proposed
Amendments and the Acquisition will not trigger the requirement
that the Company make a Change of Control Offer under the
applicable Indenture.
In each Tender Offer, upon the terms and
conditions described in the Offer to Purchase and Consent
Solicitation Statement, CDK will, promptly following the applicable
Expiration Date, accept for purchase all Notes validly tendered on
or prior to the applicable Expiration Date with respect to a Tender
Offer (the "Acceptance Date"). Payment for Notes so accepted
for purchase will be made promptly following the applicable
Acceptance Date with respect to a Tender Offer (the "Settlement
Date"). Payment for the Notes so accepted for purchase will be made
by the deposit of immediately available funds by CDK with D.F. King
& Co., Inc., promptly thereafter. CDK reserves the right to
waive any and all conditions of the Tender Offers, in whole or in
part.
In addition to the Total Consideration or
Purchase Price, as applicable, holders of Notes tendered and
accepted for payment will receive accrued and unpaid interest on
such Notes at the rate in effect on the date of the Offer to
Purchase and Consent Solicitation Statement from the last interest
payment date for the Notes up to, but not including, the applicable
Settlement Date ("Accrued Interest"), which CDK expects to coincide
with the closing of the Acquisition. As CDK intends for the
Settlement Date of each Tender Offer to coincide with the closing
of the Acquisition, CDK intends to extend the applicable Expiration
Date and, consequently, the applicable Acceptance Date and the
applicable Settlement Date for each Tender Offer in order for this
to occur.
The consummation of a Tender Offer (including to
pay the Consent Payment) is conditioned upon (1) the receipt of
consents at or prior to the applicable Consent Time from holders of
at least a majority of the outstanding aggregate principal amount
of the Notes in such Tender Offer (the "Requisite Consent"), (2)
the valid execution of a supplemental indenture to the applicable
Indenture (collectively, the “Supplemental Indentures”), (3) the
receipt by CDK of net proceeds from a financing on terms and
conditions satisfactory to CDK, which will be sufficient to fund
the Total Consideration in respect of all applicable Notes
(regardless of the actual amount of any Notes tendered) and
estimated fees and expenses relating to such Tender Offer and
Solicitation, (4) the consummation of the Acquisition and (5)
satisfaction of certain other customary conditions. CDK’s
obligation to accept any consent validly delivered in connection
with a Solicitation is conditioned upon (1) the receipt of the
Requisite Consent for such Solicitation and (2) satisfactions of
certain other customary conditions. In each case, CDK may waive any
of or all of these conditions at its discretion. Holders who
validly tender and do not validly withdraw their Notes prior to the
Withdrawal Deadline and who validly deliver and do not validly
revoke the corresponding consent at or prior to the applicable
Consent Time and whose Notes are accepted for purchase will not be
paid the Total Consideration (including the Consent Payment) or the
Purchase Price, as applicable, until the applicable Settlement
Date, and CDK's obligation to accept Notes for purchase and pay
such amounts is subject to the conditions described above. In
addition, the Proposed Amendments to each Indenture will be
effected by the applicable Supplemental Indenture, which is to be
executed at such time as CDK has received the Requisite Consent
with respect thereto. Each Supplemental Indenture will become
effective when such Supplemental Indenture is executed and
delivered by the parties thereto, but the Proposed Amendments will
not become operative unless the Notes issued thereunder tendered at
or prior to the applicable Consent Time are accepted for purchase
on the applicable Acceptance Date.
This press release does not constitute an offer
to sell or purchase, or a solicitation of an offer to sell or
purchase, or the solicitation of tenders or consents with respect
to, any security. No offer, solicitation, purchase or sale will be
made in any jurisdiction in which such an offer, solicitation or
sale would be unlawful. The Tender Offers will only be made
pursuant to the terms of the Offer to Purchase and Consent
Solicitation Statement.
The complete terms and conditions of the Tender
Offers and Solicitations are set forth in an Offer to Purchase and
Consent Solicitation Statement that is being sent to holders of the
Notes. Holders are urged to read the tender offer documents
carefully before making any decision with respect to the Tender
Offers and the Solicitations. Holders of Notes must make their own
decisions as to whether to tender any or all of their Notes and
provide the related consent.
Holders may obtain copies of the Offer to
Purchase and Consent Solicitation Statement from the Information
Agent and Tender Agent for the Tender Offers, D.F. King & Co.,
Inc., at (212) 269-5550 (collect, for banks and brokers only) and
(888) 540-8736 (toll free).
Credit Suisse Securities (USA) LLC is the Dealer
Manager for the Tender Offers and Solicitation Agent for the
Solicitations. Questions regarding the Tender Offers and
Solicitations may be directed to Credit Suisse Securities (USA) LLC
at (800) 820-1653 (toll free) and (212) 325-2476 (collect).
None of CDK, the Dealer Manager and Solicitation
Agent, the Information Agent and Tender Agent or any other person
makes any recommendation as to whether holders of Notes should
tender their Notes or provide the related consents, and no one has
been authorized to make such a recommendation.
About CDK Global, Inc.
With approximately $2 billion in revenues, CDK
Global (NASDAQ: CDK) is a leading provider of retail technology and
software as a service (SaaS) solutions that help dealers and auto
manufacturers run their businesses more efficiently, drive improved
profitability and create frictionless purchasing and ownership
experiences for consumers. Today, CDK serves over 15,000 retail
locations in North America. For more information, visit
cdkglobal.com.
Cautionary Statement Regarding Forward-Looking
Statements
This communication contains forward-looking
statements. These forward-looking statements generally include
statements that are predictive in nature and depend upon or refer
to future events or conditions, and include words such as
“believes,” “plans,” “anticipates,” “projects,” “estimates,”
“expects,” “intends,” “strategy,” “future,” “opportunity,” “may,”
“will,” “should,” “could,” “potential,” or similar expressions. By
their nature, forward-looking statements involve risks and
uncertainty because they relate to events and depend on
circumstances that will occur in the future, and there are many
factors that could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking
statements. Forward-looking statements include, among other things,
statements about the ability of the parties to complete the
proposed transaction and the expected timing of completion of the
proposed transaction; as well as any assumptions underlying any of
the foregoing.
The following are some of the factors that could
cause actual future results to differ materially from those
expressed in any forward-looking statements: (i) uncertainties as
to the timing of, and the Company’s ability to complete, the Tender
Offers and Solicitations, (ii) uncertainties as to the timing of
the equity tender offer and the merger; (iii) the risk that the
proposed transaction may not be completed in a timely manner or at
all; (iv) uncertainties as to the percentage of the Company’s
stockholders tendering their shares of common stock in the equity
tender offer; (v) the possibility that competing offers or
acquisition proposals for the Company will be made; (vi) the
possibility that any or all of the various conditions to the
consummation of the tender offer or the merger may not be satisfied
or waived, including the failure to receive any required regulatory
approvals from any applicable governmental entities (or any
conditions, limitations or restrictions placed on such approvals);
(vii) the occurrence of any event, change or other circumstance
that could give rise to the termination of the merger agreement,
including in circumstances that would require the Company to pay a
termination fee or other expenses; (viii) the effect of this
announcement or pendency of the proposed transaction on the
Company’s ability to retain and hire key personnel, its ability to
maintain relationships with its customers, suppliers and others
with whom it does business, its business generally or its stock
price; (ix) risks related to diverting management’s attention from
the Company’s ongoing business operations; (x) the risk that
stockholder litigation in connection with the proposed transaction
may result in significant costs of defense, indemnification and
liability; and (xi) other factors as set forth from time to time in
the Company’s filings with the SEC, including its annual report on
Form 10-K for the fiscal year ended June 30, 2021 and any
subsequent quarterly reports on Form 10-Q. You are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date hereof. All forward-looking statements
are based on information currently available to the Company, and
the Company expressly disclaims any intent or obligation to update,
supplement or revise publicly these forward-looking statements
except as required by law.
Media Contacts: Tony Macrito
630.805.0782 Tony.Macrito@cdk.com
Investor Relations Contact: Reuben Gallegos
847.542.3254 Reuben.Gallegos@cdk.com
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