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ADP(R)
ADP, a
leading global provider of Human Capital Management (HCM) solutions, today
announced that the company's Board of Directors has approved a plan to
separate the Dealer Services business into an independent publicly traded
company through a tax-free spin-off of 100% of Dealer Services to ADP
shareholders.
"Consistent with our strategy to grow our position as a global provider of
HCM solutions, we have concluded that the separation of Dealer Services will
allow both companies to focus on their respective industries," said Carlos
Rodriguez, president and chief executive officer, ADP. "The Dealer Services
business remains attractive in terms of long-term growth opportunities;
however, we believe this transaction will benefit ADP's shareholders by
allowing each management team to better focus on its own business and
strategic opportunities. ADP's ongoing efforts and commitment will be
focused on executing against our global HCM strategy. As we deliver against
this commitment, our goal remains driving consistent and sustainable
profitable revenue growth and return of capital to shareholders through
dividends and share repurchases."
Dealer Services is a leading global provider of retail and digital marketing
solutions to automotive retailers and manufacturers. The global automotive
market is the strongest it has been since 2007, and the volume of U.S.
vehicle sales continues its recovery to pre-crisis levels. This recovery,
combined with Dealer Services' global breadth and depth of service
offerings, makes it the appropriate time to establish this business as its
own stand-alone public company. With revenues approaching $2 billion
annually, most of which is recurring in nature, along with good
profitability and strong cash flows, we expect Dealer Services will be an
independent public company with solid long-term growth prospects. Steve
Anenen and Al Nietzel, the current president and chief financial officer,
respectively, of Dealer Services, will assume the roles of chief executive
officer and chief financial officer of the new standalone company.
In conjunction with the spin-off ADP expects to receive in a tax-free manner
at least $700 million, which proceeds ADP plans to return to its
shareholders through share repurchases after the spin-off is complete,
depending on market conditions. Following the spin-off, ADP expects to
maintain its current $0.48 quarterly cash dividend per share. Over the
medium to long term, ADP intends to return to its pre-separation target
dividend payout ratio of 55% to 60%, while keeping intact ADP's 39 year
track record of annual increases in its quarterly cash dividend, subject to
approval by ADP's Board of Directors. The spin-off will be completed upon
receipt of all required regulatory reviews and approvals. ADP expects to
complete the separation in the early part of the fourth calendar quarter of
2014.
About ADP
With more than $11 billion in revenues and more than 60 years of experience,
ADP(R)
ADP serves approximately 620,000 clients in more than 125
countries. As one of the world's largest providers of business outsourcing
and Human Capital Management solutions, ADP offers a wide range of human
resource, payroll, talent management, tax and benefits administration
solutions from a single source, and helps clients comply with regulatory and
legislative changes, such as the Affordable Care Act (ACA). ADP's
easy-to-use solutions for employers provide superior value to companies of
all types and sizes. ADP is also a leading global provider of automotive
retail and digital marketing solutions to auto retailers and manufacturers.
For more information about ADP, visit the company's Web site at www.ADP.com.
This document and other written or oral statements made from time to time by
ADP may contain "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Statements that are not
historical in nature and which may be identified by the use of words like
"expects," "assumes," "projects," "anticipates," "estimates," "we believe,"
"could" and other words of similar meaning, are forward-looking statements.
These statements are based on management's expectations and assumptions and
are subject to risks and uncertainties that may cause actual results to
differ materially from those expressed. Factors that could cause actual
results to differ materially from those contemplated by the forward-looking
statements include: ADP's success in obtaining, retaining and selling
additional services to clients; the pricing of products and services;
changes in laws regulating payroll taxes, professional employer
organizations and employee benefits; overall market and economic conditions,
including interest rate and foreign currency trends; competitive conditions;
auto sales and related industry changes; employment and wage levels; changes
in technology; availability of skilled technical associates; and the impact
of new acquisitions and divestitures. In addition, the proposed spin-off of
the Dealer Services business is subject to inherent risks and uncertainties,
including: risks that the spin-off will not be consummated; increased
demands on our management team to accomplish the spin-off, significant
transaction costs, risks of changes in our credit rating and risks from
changes in results of operations of our reportable segments. ADP disclaims
any obligation to update any forward-looking statements, whether as a result
of new information, future events or otherwise. These risks and
uncertainties, along with the risk factors discussed under "Item 1A. - Risk
Factors" in our Annual Report on Form 10-K for the fiscal year ended June
30, 2013 should be considered in evaluating any forward-looking statements
contained herein.
CONTACT: Investor Relations Contacts:
Elena Charles
973.974.4077
elena.charles@ADP.com
Sara Grilliot
973.974.7834
sara.grilliot@ADP.com
Media Contact:
Michael Schneider
973.567.1775
michael.schneider@ADP.com
(END) Dow Jones Newswires
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