(Adds comment from CDK in 6th paragraph)

By Michael Flaherty and Ankit Ajmera

May 4 (Reuters) - Elliott Management stepped up its pressure on CDK Global Inc on Wednesday, saying the software company needed to streamline its operations or explore a sale.

Elliott first invested in CDK last May, and within months, private equity buying interest began to form around the stock.

But a sale never materialized, and the company's stock has fallen nearly 20 percent to $48 per share since last June. In March, CDK named Brian MacDonald as the company's new chief executive.

"There are absolutely merits to receiving certain, premium value in the form of a sale for cash, which requires no ongoing exposure to business risk or the capital markets," said the Elliott letter, signed by the activist hedge fund's senior portfolio manager, Jesse Cohn.

If the company remains a stand alone entity, it needs to implement a plan to maximize shareholder value immediately, Cohn wrote, outlining a detailed program on what can be done.

"We value the opinion of our shareholders and are reviewing the Elliott letter," CDK spokesman Kyle Donash said in an emailed statement.

CDK Global was spun off from Automatic Data Processing Inc in 2014. Elliott, which says it owns 8.6 percent of CDK's shares, is among three activist hedge funds invested in the company.

Sachem Head Capital owns 7.2 percent of the company, which provides marketing software to auto dealers, while Fir Tree Partners owns 4.9 percent, according to Thomson Reuters data.

Elliott and Cohn have successfully pushed several mergers across the tech industry, the latest being Mitel Networks Corp. agreement to buy U.S. voice and telephony gear maker Polycom Inc., in a deal announced last month.

(Editing by Don Sebastian and Alan Crosby)