Once the spinoff of ADP’s Dealer Services Group is completed — most likely in October — the new company will be branded CDK Global Inc. The name is derived from the three dealer-related business units currently owned by ADP: Cobalt Digital Marketing; Dealer Services; and the global Kerridge Computer Co., a company in the UK which was acquired in 2005.
The Dealer Services group generates close to $2 billion in annual revenue for ADP. The spinoff is expected to generate more than $700 million for ADP which has said it will use the proceeds for share buybacks for investors.
The move was announced in April and will add to what has been a busy year for automotive retail vendors on the acquisition front. DealerTrack’s $987 million purchase of Dealer.com; TrueCar’s IPO; KKR’s $1.1 billion buy of Internet Brands (CarsDirect), and Gannett Co.’s purchase of Cars.com valued at $2.5 billion.