ADP board approves brokerage spin-off

Source: Automatic Data Processing

The Board of Directors of Automatic Data Processing, Inc. (NYSE:ADP) has approved today the proposed spin-off of its Brokerage Services Group business to ADP's shareholders. The spin-off will result in a separate publicly traded company that will be called Broadridge Financial Solutions, Inc. ("Broadridge").

To accomplish the spin-off, ADP's Board of Directors declared a dividend of one share of Broadridge common stock for every four shares of ADP common stock held by shareholders of record as of the close of business on March 23, 2007. The distribution is expected to occur as of the close of business on March 30, 2007, and is expected to qualify as a tax-free transaction. No fractional shares will be distributed. Shareholders who own fewer than four shares of ADP common stock (or who do not own multiples of four shares) will receive a taxable cash payment in lieu of the fractional share to which they would otherwise be entitled.

It is currently expected that a "when issued" public market for Broadridge common stock on the New York Stock Exchange will commence on or about March 22, 2007 under the symbol "BR.twi." Following the spin-off, Broadridge common stock will trade under the symbol "BR."

If an ADP shareholder sells shares of his or her ADP common stock (which trades on the NYSE under the symbol "ADP") in the "regular way" market on or prior to the distribution date, such shareholder will also be selling the right to receive his or her shares of Broadridge common stock such shareholder would have received in the distribution. If an ADP shareholder sells shares of his or her ADP common stock in the "ex-distribution" market on or prior to the distribution date, such shareholder will still receive shares of Broadridge common stock in the distribution. Shareholders are encouraged to consult with their financial advisors regarding the specific implications of selling shares of ADP common stock on or before the distribution date.

Completion of the spin-off is subject to the satisfaction of a number of conditions, including (i) a registration statement on Form 10 for Broadridge's common stock being declared effective by the Securities and Exchange Commission, (ii) Broadridge common stock being accepted for listing on the NYSE, (iii) the receipt of a favorable ruling from the Internal Revenue Service that the spin-off will be tax-free to the ADP shareholders and (iv) certain other conditions described in the Form 10. The ADP Board of Directors has reserved the right to withdraw its declaration of the dividend at any time prior to the distribution.

Prior to the spin-off, Broadridge expects to enter into a new credit facility and to use $690 million of proceeds from the facility to pay a dividend to ADP. ADP will use these funds, together with approximately $60 million distributed from its Canadian subsidiaries, to repurchase shares of ADP through open market purchases, self tenders or other targeted share repurchase transactions during the 12 months following the spin-off.

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