Acquisition Overview

Keyera Corp. announced that it has completed the purchase of the remaining 50% non‑operating stake in the KAPS Pipeline from Stonepeak for a cash consideration of $1.215 billion. The transaction closed on the same day it was announced, 18 June 2026, and results in Keyera holding 100% ownership of the KAPS Pipeline, a natural‑gas‑liquids (NGL) system that transports condensate and NGL production from the Montney and Duvernay resource plays to downstream markets.

Operational Impact

Since 2025, Keyera has added more than 120,000 barrels per day of new commitments across KAPS Zones 1 to 4. Construction of KAPS Zone 4 remains on schedule and on budget, with an expected in‑service date in mid‑2027. The pipeline is supported by long‑term contracts that have an average remaining term of approximately 12 years, with take‑or‑pay contributions accounting for about 75% of contracted volumes.

Financial Implications

The acquisition is projected to be low‑single‑digit accretive to distributable cash flow per share over the next several years. Including the remaining capital required to complete Zone 4, the transaction implies an acquisition multiple of roughly 11 times 2029 EBITDA based on currently contracted volumes. After the completion and ramp‑up of Zone 4 through 2030, KAPS is expected to generate free cash flow supported by contracted volume growth and minimal maintenance capital requirements.

Keyera’s targeted fee‑based adjusted EBITDA per share compound annual growth rate (CAGR) is adjusted upward from a range of 15%‑17% to 16%‑18% for the period 2025‑2027, while the 2027‑2029 target of 7%‑8% remains unchanged. The company expects its net‑debt‑to‑adjusted‑EBITDA ratio to stay within the target range of 2.5×‑3.0× by 2028.

Capital Structure and Funding

To fund the purchase price, Keyera entered into an agreement to issue $525 million of common equity through a bought‑deal offering, prior to the exercise of any over‑allotment option. The equity issuance was financed through borrowings under existing credit facilities of Keyera Partnership. Additionally, Keyera anticipates approximately $100 million of extra growth capital in 2026 to fund its increased share of the remaining capital needed to complete Zone 4.

Advisory and Legal Counsel

RBC Capital Markets acted as financial advisor to Keyera. Norton Rose Fulbright Canada LLP and McCarthy Tétrault LLP served as legal advisors to Keyera. Scotia Capital Inc. was the financial advisor to Stonepeak, while Sidley Austin LLP, Stikeman Elliott LLP, and Goodmans LLP represented Stonepeak as legal advisors.

Outlook

The acquisition aligns with Keyera’s strategy to enhance and extend its integrated value chain, delivering competitive services that enable customers to maximize value for their products, as stated by President and Chief Executive Officer Dean Setoguchi.