CDK GLOBAL, INC. Item 1.01 Entry Into a Material Definitive Agreement.
Agreement and Plan of Merger
As previously announced, on
Pursuant to the Merger Agreement, upon the terms and subject to the conditions
thereof, Merger Sub will commence a cash tender (the "Offer") no later than 10
business days after the date of the Merger Agreement, to purchase all of the
outstanding shares of common stock of the Company, par value
The obligation of Merger Sub to purchase shares of Common Stock validly tendered
and not properly withdrawn pursuant to the Offer is subject to the satisfaction
or waiver of the conditions set forth in the Merger Agreement, including (i)
that the number of shares of Common Stock validly tendered and not properly
withdrawn prior to the expiration of the Offer, excluding shares of Common Stock
tendered pursuant to guaranteed delivery procedures that have not yet been
"received" (as such term is defined in Section 251(h) of the Delaware General
Corporate Law, as amended (the "DGCL")), together with any shares of Common
Stock (if any) owned by Parent, Merger Sub, or any of their affiliates,
represents at least a majority of the then outstanding shares of Common Stock
(the "Minimum Condition"); (ii) the absence of any law or order prohibiting the
consummation of the Offer or the Merger (as defined below); (iii) (x) the
expiration or termination of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended and (y) the consents or approvals
under the Competition Act (
Following the consummation of the Offer and subject to the satisfaction or waiver of conditions as set forth in the Merger Agreement, Merger Sub will be merged with and into the Company (the "Merger"), with the Company surviving the Merger as a wholly owned subsidiary of Parent (the "Surviving Corporation"). The Merger will be governed by Section 251(h) of the DGCL and effected without a vote of the Company stockholders. As a result of the Merger, each share of Common Stock (other than Common Stock that is not (i) validly tendered and irrevocably accepted for payment pursuant to the Offer, (ii) held by a holder who is entitled to demand and properly demands the appraisal of such shares in accordance with Section 262 of the DGCL; (iii) owned by the Company or held in the Company's treasury immediately prior to the Effective Time; (iv) owned by any direct or indirect wholly-owned subsidiary of the Company immediately prior to the Effective Time or (v) owned by Parent or Merger Sub or any other direct or indirect wholly-owned subsidiary of Parent, both at commencement of the Offer and immediately prior to the Effective Time) will be automatically converted into the right to receive an amount in cash equal to the Offer Price (the "Merger Consideration"), without interest and in accordance with the terms of the Merger Agreement.
The Merger Agreement also provides that (i) each Company stock option will be canceled in exchange for the right to receive an amount in cash, without interest, equal to the product of the excess, if any, of the Merger Consideration over the per-share exercise price of the applicable Company stock option, multiplied by the aggregate number of shares of Common Stock subject to such Company stock option immediately before the Effective Time; provided, that any Company stock option with a per-share exercise price equal to or greater than the Merger Consideration will be canceled for no consideration, (ii) each Company restricted share will be converted into the right to receive an amount in cash, without interest, equal to the Merger Consideration, (iii) each Company restricted stock unit will be converted into the right to receive an amount in cash, without interest, equal to the Merger Consideration multiplied by the aggregate number of shares of Common Stock subject to such Company restricted stock unit immediately before the Effective Time and (iv) each Company performance stock unit will be converted into the right to receive an amount in cash, without interest, equal to the Merger Consideration multiplied by the aggregate numbers of shares of Common Stock subject to such Company performance stock unit immediately before the Effective Time (assuming that all applicable performance metrics for performance periods that have not been completed as of immediately before the Effective Time had been achieved (on a cumulative basis and not on individual performance year basis) at the greater of target level and actual performance measured through the Effective Time, with the financial performance metrics in respect of any fiscal year commencing after the 2022 fiscal year being deemed achieved at the target level).
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The Merger Agreement includes representations and warranties, and covenants of the parties customary for a transaction of this nature. Until the earlier of the termination of the Merger Agreement and the date on which the Merger becomes effective (the "Effective Time"), the Company has agreed to use its reasonable best efforts to conduct its business and the business of its subsidiaries in the ordinary course, and has agreed to certain other operating covenants, as set forth more fully in the Merger Agreement. Subject to the terms and conditions of the Merger Agreement, the Company has also agreed not to solicit or initiate discussions with any third party regarding acquisition proposals.
The Merger Agreement includes a remedy of specific performance for the Company,
Parent and Merger Sub. The Merger Agreement also includes customary termination
provisions for both the Company and Parent, including, among others, a mutual
termination right if the Offer has not been consummated on or before
The Company is entitled to terminate the Merger Agreement and receive a
termination fee equal to
The foregoing description of the Merger Agreement and the transactions
contemplated thereby does not purport to be complete and is qualified in its
entirety by reference to the Merger Agreement, which is filed as Exhibit 2.1 to
this report and which is incorporated herein by reference. The Merger Agreement,
and the foregoing description of the Merger Agreement, have been included to
provide investors and our stockholders with information regarding the terms of
the Merger. The assertions embodied in the representations and warranties
contained in the Merger Agreement are qualified by information in confidential
disclosure schedules. Moreover, certain representations and warranties in the
Merger Agreement were made as of a specified date, may be subject to a
contractual standard of materiality different from what might be viewed as
material to stockholders, or may have been used for the purpose of allocating
risk between the parties to the Merger Agreement. Accordingly, the
representations and warranties in the Merger Agreement should not be relied on
by any persons as characterizations of the actual state of facts and
circumstances about the Company, Parent or Merger Sub at the time they were made
or otherwise, and information in the Merger Agreement should be considered in
conjunction with the entirety of the factual disclosure about the Company in the
Company's public reports filed with the
Debt and Equity Commitments
Parent has obtained equity and debt financing commitments that are customary for
transactions contemplated by the Merger Agreement, the aggregate proceeds of
which will be sufficient for Parent to pay the aggregate consideration required
by the Offer and the Merger and all related fees and expenses. Financing will
consist of common equity committed by entities affiliated with Brookfield Asset
Management, Inc. and debt committed by third party financing sources.
Parent has secured committed equity financing provided by Brookfield Asset
Management, Inc., a corporation organized under the laws of
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Bank AG New York Branch, Deutsche Bank AG Cayman Islands Branch,
Additional Information
The tender offer for the outstanding common stock of the Company has not yet
commenced. This communication does not constitute a recommendation, an offer to
purchase or a solicitation of an offer to sell the Company's securities. An
offer to purchase shares of the Company's common stock will only be made
pursuant to an Offer to Purchase and related tender offer materials. At the time
the tender offer is commenced, Merger Sub will file a Tender Offer Statement on
Schedule TO with the
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number Description of Exhibit
2.1 Agreement and Plan of Merger, dated as of April 7, 2022 , by and among CDK
Global, Inc. , Central Parent LLC and Central Merger Sub Inc.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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