Financial Framework and Capital Discipline
Adding High Demand Capacity at Attractive Valuation
Transaction Highlights.
Expands Core of
Value Chain:
Meaningful
Synergies:
Immediately
Accretive:
Attractive
Multiple:
Increased
Fractionation
Capacity:
Capital Efficient
Growth Options:
Strong Go-
Forward Balance
Sheet Flexibility:
More than 25% incremental capacity added to fractionation, de-ethanization,
underground NGL storage and the Fort Saskatchewan Pipeline System (FSPL).
Added meaningful fee-for-service cash flows.
Added operational flexibility, increased volumes available for margin capture in
Keyera's Marketing segment and tax savings.
Distributable cash flow per share is expected to average approximately 3%
accretion per year, including tax synergies.
Acquisition price of $365 million represents approximately 11x expected 2023
Operating Margin, and approximately 9.5x on the same measure thereafter.
Increased fractionation capacity bolster's Keyera's ability to secure long-term
contracts in a tight market and accommodate incremental KAPS volumes. It
also eliminates project execution risk.
Future fractionation capacity expansions, including potential de-bottlenecks,
are expected to be more capital efficient given the acquisition includes
additional storage and pipeline capacity.
Funded through a combination of cash-on-hand, existing credit facilities and a
$200 million bought deal equity offering, maintaining corporate debt leverage
within the Corporation's target range of 2.5x to 3.0x net debt to adjusted
EBITDA2.
See slide 22 for notes regarding this slide
16View entire presentation