Advantages of recent acquisitionJust summarizing six benefits of the recent acquisition from the different analysts covering KEY. KEY is one of my best holdings.
1. Adding existing capacity without needing multi year construction that would likely have experienced construction delays and inflation cost over runs.
2. Able to integrate spare frac capacity with spare KAPS capacity that will benefit both assets.
3. The ability to immediately market frac capacity and bundle with other offerings is a strategic advantage for KEY.
4. Increased fractionation capacity strengthens KEY's ability to secure long-term contracts. Long term contracts = less share price volitility.
5. Issuing equity is conservative and attractive since KEY will remain at or below their debt ratio targets. Shows managemenet discipline by maintaining their financial guard rails.
6. 3% DCF accretion supports the existing dividend and future dividend increases.