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ADP Completes Spin-Off of Automotive Dealer Services Business

Longtime client Automatic Data Processing, Inc. (ADP) completed the distribution to its stockholders of all of the issued and outstanding common stock of CDK Global, Inc. in a tax-free spin-off. The distribution completes the spin-off by ADP of its automotive dealer services business. CDK Global began formal trading on the NASDAQ Global Select Exchange today under the ticker symbol "CDK" and it has an equity value exceeding $4.9 billion.

The spin-off culminates an extraordinary nine month-long effort by our tax, corporate, intellectual property and employee benefits departments. The tax department designed the steps of the transaction, including an extensive global internal restructuring, provided an opinion regarding the tax-free treatment of the restructuring and spin, and is in the process of obtaining a highly complex IRS ruling relating to certain aspects of the spin-off transaction not covered by the opinion. The corporate department spearheaded a global restructuring of the CDK Global and ADP businesses involving coordination with foreign counsel and local teams in 23 different jurisdictions around the world to accomplish a series of complex steps, created an information statement to register the CDK Global shares with the SEC and list them on the NASDAQ, negotiated and closed two new credit facilities and a bridge loan facility for CDK Global totaling $1.35 billion, $1 billion of which has been drawn down in connection with the consummation of the spin, and created the ongoing transitional arrangements governing the ADP-CDK Global relationship after the spin-off, including a comprehensive data center services agreement. The employee benefits department not only created a new set of employee benefit arrangements for CDK Global, but also separated the ADP stock incentive arrangements into ADP and CDK Global pieces.

The Paul, Weiss team included, among others, tax partner Jeffrey Samuels and counsel Alyssa Wolpin; corporate partners Neil Goldman, David Huntington and Toby Myerson and counsel David Harris and Menachem Kaplan; employee benefits partner Lawrence Witdorchic; and litigation partner Aidan Synnott.

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