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Automatic Data Processing, Inc. (Nasdaq: ADP) has entered into a definitive agreement to acquire for approximately $400 million, in cash, Gary C. Butler, president and chief executive officer, announced today. The transaction is subject to normal regulatory review and is expected to close in four to six weeks.
Commenting on the transaction, Mr. Butler said:
"I am pleased to announce this transaction. Acquisitions that complement our core businesses are a key part of ADP's five-point strategic growth program and the primary focus of our capital allocation strategy. Cobalt is the leading provider of digital marketing solutions to automotive manufacturers and dealers in North America. This transaction aligns with ADP Dealer Services' global layered applications strategy to increase "share of wallet" beyond its core dealer management system offering. We believe the timing of this transaction is optimal as online advertising spend is expected to continue to outpace that of traditional channels in the U.S."
Cobalt is privately held and headquartered in Seattle, Washington. ADP expects the transaction to be slightly accretive in the first year, with continued positive earnings contributions anticipated in subsequent years.
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