Keyera Corp T.KEY

Advantages of recent acquisition

[hawk35]

Just 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.

[hawk35]

I have one more advantage of the recent acquisiton.  Its my personal opinion. KEY management had the opportunity to buy the 50% interest in KAPS.  They declined to do so. This was amazing.  KAPS has two componenets.  The fee charged is one.  The profit is spread over a 20 or 30 year amortization.  The big money comes from KEY's existing plants that provide value

[barneyj44]

Thanks for your insight Hawk35. Im relatively new here traded a couple of times. Purchased for the dividend  and a little capital appreciation. Its a long time hold now.