ROSELAND, N.J. -

ADP announced this morning that it plans on spinning off its Dealer Services business.

The company said in a statement that its board of directors approved a proposal to separate the Dealer Services unit into an independent publicly traded company; this will be done via a tax-free spinoff of the entirety of Dealer Services to ADP shareholders, ADP explained.

“Consistent with our strategy to grow our position as a global provider of HCM solutions, we have concluded that the separation of Dealer Services will allow both companies to focus on their respective industries,” said Carlos Rodriguez, ADP’s president and chief executive officer.

“The Dealer Services business remains attractive in terms of long-term growth opportunities; however, we believe this transaction will benefit ADP's shareholders by allowing each management team to better focus on its own business and strategic opportunities. ADP’s ongoing efforts and commitment will be focused on executing against our global HCM strategy,” he continued. “As we deliver against this commitment, our goal remains driving consistent and sustainable profitable revenue growth and return of capital to shareholders through dividends and share repurchases."

Current Dealer Services president Steve Anenen will be CEO of the new standalone company, and current chief financial officer Al Nietzel will remain in that role for the new entity.

Officials expect the spinoff to be completed early in the fourth quarter, once all required regulatory reviews and approvals are done.

With the spinoff, ADP anticipates receiving at least $700 million “in a tax-free manner,” and then returning the proceeds to shareholders via share repurchases once the spinoff is completed, “depending on market conditions,” the company indicated.

In an emailed statement this morning, Donna Combs — who is the vice president of marketing at ADP Dealer Services — said: “Rest assured, this is a positive announcement. Dealer Services, for all practical purposes, has operated as a standalone organization under the ADP umbrella for many years. This change will allow us to more sharply focus on our strategies and priorities, which are based on meeting our clients’ unique needs.

“Post-spin, we will be a global $2 billion company (Fortune 1000) serving over 26,000 clients in more than 100 countries with scale and resources to meet market needs.  Our clients will benefit from us being an independent, more sharply focused organization.  We intend for this transaction to be seamless to our clients, other than a name change,” she continued. “I am sure you all have many questions, but note that no one at ADP or Dealer Services can comment further on this until the transaction is complete.”