Kar Auction Services (KAR) Declares $0.27 Quarterly Dividend; Plans $200M Common Stock Accelerated Buyback
Kar Auction Services (NYSE: KAR) declared a quarterly dividend of $0.27 per share, or $1.08 annualized.
The dividend will be payable on October 1, 2015, to stockholders of record on September 23, 2015, with an ex-dividend date of September 21, 2015.
The annual yield on the dividend is 2.8 percent.
The company also announced that it plans to enter into an accelerated share repurchase agreement under which the Company expects to repurchase up to $200 million of the Company's common stock on an accelerated basis. The accelerated share repurchase is part of the Company's previously authorized program to repurchase up to $300 million of the Company's common stock.
"We are delighted to announce that we plan to enter into an accelerated share repurchase plan, further demonstrating our commitment to creating value for KAR's stockholders," commented Jim Hallett, Chairman and Chief Executive Officer of KAR Auction Services, Inc. "At the same time, we remain fully committed to investing in our businesses so as to capitalize on long-term growth opportunities and given the strength of our free cash flow, we believe that we can execute both of these value creation tactics."
The Company expects to receive an initial delivery of approximately 4.5 million shares of the Company's common stock shortly after execution of the accelerated share repurchase agreement, with the final number of shares to be repurchased under the agreement to be based on the volume weighted average share price of the Company's common shares during a specified calculation period. Upon final settlement of the accelerated shares repurchase agreement, the Company may receive additional shares of the Company's common stock from the counterparty to the accelerated share repurchase agreement or, under certain circumstances, be required to deliver shares of common stock or to make a cash payment, at its election, to the counterparty. The program is expected to take up to six months to complete. The Company will fund the share repurchase through cash on hand and borrowings under its revolving credit agreement.
For a dividend history and other dividend-related data on Kar Auction Services (KAR) click here.