A CDK Global plan to divest its digital marketing business allows the CDK management team to work on increasing momentum in its core auto software business and to accelerate fiscal 2020 growth, CDK Global president and chief executive officer Brian Krzanich said in a news release.
The company’s digital marketing business includes all of its Advertising North America business segment and some assets of its Retail Solutions North America segment that relates to mobile advertising and website services.
CDK Global reached the divest decision after thoroughly evaluating the CDK portfolio. The company said the decision aligns with its strategy of focusing on the core suite of SaaS software and technology products for the markets it serves through its Retail Solutions North America and CDK International segments.
The company said it will present the digital marketing business as discontinued operations beginning with the fourth quarter. CDK Global, which provides its services to dealers in more than 100 countries and serves about 30,000 retail locations and most automotive manufacturers, has engaged Allen & Company to identify potential buyers and evaluate proposals for the digital marketing business.
“We believe the digital marketing business is an attractive asset for someone who is better positioned to leverage the technology platform and management team that we have built,” Krzanich said. “During this transition period we remain committed to our CDK Digital Marketing customers, and will continue to support our comprehensive suite of digital marketing technologies and services.”
Those interested in seeing additional details about the decision can review a Current Report on Form 8-K filed with the Securities and Exchange Commission on Thursday. In early August, the company will hold its fiscal fourth quarter and fiscal year ending June 30 earnings call. That call will include updates on the plan and fiscal 2020 guidance, as well as an update to the capital allocation strategy.