After losing a key exclusivity agreement with General Motors this year, CDK Global Inc. took a close look at its digital marketing business — and found it lacking.
The dealership software giant announced last week that it will divest that business to focus more on its core automotive software operations. The company, in a regulatory filing, said the potential sale includes all assets of its North American advertising segment and portions of its North American retail solutions segment related to mobile advertising and website services.
Revenue for CDK’s North American advertising segment fell 18% in its fiscal third quarter ended March 31. CEO Brian Krzanich said in an earnings call that the unit “has continued to be a headwind on total company growth.”
CDK plans to complete the move within 12 months. The company is working with Allen & Co. to identify potential buyers and evaluate proposals.
CDK’s digital marketing business represented about 19% of revenue and 13% of pretax earnings in the nine months ended March 31, according to the filing.
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