CDK suitors Carlyle, Silver Lake go pencils down, sources say

14 February 2018 - 11:10 pm UTC

Author(s): by Bhavna Kaul, Jay Antenen and David Carnevali
The Carlyle Group and Silver Lake consortium is no longer actively working on a buyout for CDK Global [NASDAQ:CDK], said two sources briefed on the situation.

CDK’s valuation is giving the private equity firms pause, the two sources said. A buyout for the close to USD 10bn market cap technology company is challenging factoring in its size and the need for a deal premium, one of the sources said. The second source said if CDK revises its valuation expectations it is possible deal talks could be revived.

Last week, Bloomberg News reported that Carlyle and Silver Lake were in advanced talks to buy CDK and that a deal could be reached this month. This news service has previously named Carlyle and Silver Lake as one of three consortiums pursuing CDK.

The two other consortiums, Vista Equity Partners and Bain Capital and Thoma Bravo and Advent International, were no longer actively negotiating with CDK, Bloomberg said. A third source briefed on the matter said the buyout consortiums have put pencils down on valuation concerns.

Last year, this news service reported that CDK, a developer of software and marketing services for auto dealerships, was working with Morgan Stanley and Credit Suisse to explore a sale. CDK’s stock has gained over 13% since the November report.

Carlyle and Silver Lake declined comment. CDK did not return a request for comment.