Rumor has it that CDK will be sold and taken private on the 15th of September. Also, 6 Project Managers resigned in the last two weeks. Kinda glad I got 6 months severance in July.
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Very true "Cash Cow"... if my memory serves me correctly.. CDK repurchased approx. 1.2B of stock the past 1.5 years... the stock price just didn't follow.. I think Plan "B" is January 1, 2019. Also, All of the officers and Upper Management got quite a bit of stock on 9/7/18, but Happy Meal didn't.
"Cash cow".. we are now 1.75B with debt
In the August quarterly meeting with the analysts, cash margins were reported as 35.9%, which would be around $700M/year. That ratio is not a looming catastrophe. The interest paid may be a drag on earnings, but unless revenues or margins get clobbered or the debt is not paid down and the interest rates paid rise seriously, not a big problem. However, achieving these high margins was supposed to produce a stock price of $85, but even with this news, a rising market, and all the stock buybacks, it's stagnant (below where it was about 18 mos. ago). What went wrong? What will Plan B look like?
Found Brian McGreedy's employment agreement online. Says his Term is 3 years commencing January 1, 2016 so his time is winding down unless the extension subsequently mentioned in this agreement goes into effect.
https://www.sec.gov/Archives/edgar/data/1609702/000095014215002588/eh1501432_ex1001.htm
Not so sure we are a "Cash cow".. we are now 1.75B with debt... 400M at the spinoff 900M in 2016 and 500M this past May.. the 400M is going to be due very soon....
LateStageCapitalism, well said.
American management at it's financialized worst, in the theme of taking formerly strong companies like IBM and GE, and looting and slowly killing them. Kind of like organized crime skimming off the top and gutting formerly good companies.
From one extreme to another for the folks who remember ADP-DS. Former ADP-DS execs were just riding the wave with sugar daddy ADP paying the bills. They all bailed when DS was sold as CDK.
Annenen must be laughing his arse off while sipping drinks on the beach. Same for the former Cobalt founder. They left a bunch of fat to cut, but the current crop of hacks and looters in exec management (and their Accenture buddies) have no clue what the business is or how to run it. Good luck to the remaining employees and customers. They don't know it or care, but they're running an experiment to see how "stickly" CDK customers really are.
The 15th is a Saturday.
More likely those with unvested RSUs are on the next RIF list.....
Incorrect - RSUs will not automatically vest in the acquisition of a company. There are many possible outcomes to what would happen with them, all subject to the terms of the sale. There might be a full or partial cash out, or you may get the equivalent value of the RSU as a payout on your normal vesting schedule provided you remain employed. Or nothing.
The misinformation that floats around out here is crazy.
So in theory what would happen on the 15th if the "company is being sold"? An offer would be brought to the shareholders?
No, you are thinking of a take-over type situation. Someone can offer to the purchase the company at a certain price which would typically then be voted on by the board and/or the shareholders. The buyer could offer just cash or a stock/cash combo. Most likely we would be bought by a private equity company (PEC) or a group of them as was noted in the spring discussions posted in The Banks Report, so it would be a cash offer as they have no stock to offer.
I know that it feels that we have hit our low point and maybe we have, but no one is going to come in and increase our benefits, hire the veterans back and make this like the old ADP days. It's not going to happen. Ultimately, the objective of a PEC is to make more money on their investment. This means either selling off parts of a company for profit or eventually spinning it off into a public company again a few years later (lather, rinse, repeat). We are a cash cow, so someone may just hold on to us for a while too and rake in the money. That doesn't mean that we will benefit in any way.
I caution folks not to think that this is going to be our salvation. It could likely lead to a breakup of the company or other unfavorable changes (look at Toys R' Us for example). A change of management is not a given either!
Welcome to late-stage capitalism everyone. For those ADP long-timers, I'm sorry, but you've been sheltered from modern corporate reality. What is happening at CDK, while drastic, is nothing unusual.
What's the good news?
(1) Any current employee's unvested restricted stock should automatically vest if we are sold. Meaning that you would get a payout for the stock even if it wasn't vested.
(2) Given how deep the cuts have been, a new owner would likely be more focused on retaining talent/knowledge for the first year or so.
(3) A PEC isn't going to have redundant positions that can be eliminated. This would be a different scenario if someone likes Cox's bought us, but we are too big for a deal like that (i.e. antitrust issues).
(4) Is has NEVER been easier to start your own business. Find a niche and you'll find customers.
(5) We have this new LEAD training...j/k
Can it be "sold" without someone having bought a ton of shares? Wouldn't the share price have gone up?
If it is going private with a new owner then this owner certainly has their work cut out for them. In my opinion almost everyone in management needs to be replaced. I realize many of them had to be sleazy to keep their jobs, but I know I can't let it go and will not have any trust in existing management even with new owners.
If this is public already can you post the link so the rest can read, pray and jump for joy.
Woohoo! I can’t imagine things getting much worse, hopefully a new owner can return some of the Cobalt/ADP glory