NEW JERSEY, UNITED STATES — Automatic Data Processing Inc. (ADP), a human resources (HR) management software and services provider, has fortified its financial standing by entering into two major credit agreements worth a combined $8.05 billion.
Finalized on June 28, 2024, the agreements consist of a $4.55 billion 364-day credit arrangement and a $3.5 billion five-year credit arrangement with a group of lenders. These new facilities replace ADP’s previous credit agreements, substantially increasing the company’s credit capacity.
The five-year facility allows for a potential increase of $500 million, potentially raising the total commitment to $4 billion. This expanded credit capacity grants ADP greater financial flexibility to support its operations and strategic initiatives.
The 364-day facility commitments expire on June 27, 2025, with an extension option to June 27, 2026. The five-year facility commitments expire on June 28, 2029, with an optional one-year extension.
JPMorgan Chase Bank, N.A. will act as the administrative agent for both facilities, while Bank of America, N.A., BNP Paribas, Wells Fargo Bank, N.A., and Deutsche Bank Securities Inc. will serve as syndication agents.
ADP’s robust financial performance
ADP reported a revenue increase to $5.25 billion for the quarter ending March 31, surpassing analysts’ expectations. Adjusted earnings reached $2.88 per share, outpacing the estimated $2.79 per share, according to LSEG data.
“Healthy new business bookings and strong client retention contributed to our robust results,” said ADP chief executive officer Maria Black.
Revenue from ADP’s Employer Services segment, which provides HR outsourcing and employee management solutions, grew by 8% to $3.59 billion compared to the previous year.
With a global presence, ADP serves clients in the United States, the United Kingdom, and various European countries.
The company’s services include payroll processing, talent management, and other essential HR functions for businesses of all sizes.
