ADP (ADP +1%) is spinning off its Dealer Services unit, a provider of IT solutions to 26K+ vehicle dealers, through an IPO. The transaction is expected to close by the early part of Q4.
The BPO giant expects to receive tax-free proceeds of at least $700M, which it plans to return to shareholders via buybacks once the spinoff is finished. Dealer Services accounts for nearly $2B of ADP's $11B+ in annual sales.
CEO Carlos Rodriguez: "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."