Keyera acquires remaining 50% stake in KAPS

Canada NewsWire On strategy transaction generates strong free cash flow 1 and is accretive to distributable cash flow per share 1 Accelerates fee-based adjusted EBITDA per share 1 growth outlook Enhances quality and durability of growing cash flow well into the next decade Preserves strength and flexibility of balance sheet CALGARY, AB , June 17, 2026 /CNW/ - Keyera Corp. (TSX: KEY) ("Keyera" or the "company") today announced closing of the acquisition of the remaining 50% non-operating interest in the KAPS Pipeline from Stonepeak, a leading alternative investment firm specializing in infrastructure and real assets, for $1.215 billion, pursuant to the terms of a definitive agreement dated June 17, 2026. The transaction was closed concurrent with the announcement. Keyera now owns and will continue to operate 100% of the KAPS Pipeline, a highly strategic natural gas liquids ("NGL") pipeline system connecting growing condensate and NGL production from the Montney and Duvernay resource plays to high-value downstream markets.

Since 2025, Keyera has added over 120,000 barrels per day of new commitments across KAPS Zones 1 to 4 from high quality counterparties supporting stable, long-term fee-based cash flow 1 growth. KAPS Zone 4 construction continues to be on time and on budget with an expected mid-2027 in-service date. "This transaction is directly aligned with our strategy to enhance and extend our integrated value chain and deliver competitive services that help our customers maximize value for their products," said Dean Setoguchi, President and Chief Executive Officer of Keyera.

"Full ownership of KAPS provides greater flexibility and efficiency for our customers while enhancing Keyera's exposure to long-term growth and highly contracted cash flows." Transaction Highlights Greater flexibility and efficiency for customers: Full ownership of KAPS allows customers to more efficiently connect growing Montney and Duvernay production to high-value downstream markets. Accretive to distributable cash flow ("DCF") per share: The acquisition is expected to be low-single digit accretive to distributable cash flow per share over the next several years. Following the completion and ramp-up of Zone 4 through 2030, KAPS is expected to generate significant free cash flow 1 , supported by contracted volume growth, minimal maintenance capital requirements and tax efficiencies achieved through the transaction.

Including the remaining capital required to complete Zone 4, the transaction implies an acquisition multiple of approximately 11 times 2029 EBITDA 1 based on currently contracted volumes, and does not reflect upside from future contracting opportunities. Improved growth outlook: The transaction increases Keyera's targeted fee-based adjusted EBITDA per share 1 CAGR from 15% to 17% to 16% to 18% between 2025 and 2027. Keyera's targeted 7% to 8% fee-based adjusted EBITDA per share 1 CAGR from 2027 to 2029 remains unchanged and is supported by an even stronger foundation for growth.

Enhanced quality and durability of Keyera cash flows: KAPS is supported by long-term contracts and stable fee-based 1 cash flows, further improving the quality, visibility, and durability of Keyera's overall cash flow profile. Fee-based cash flows are underpinned by contracts with an average remaining term of approximately 12 years and 75% take-or-pay contributions. Preserves Keyera's financial strength: The financing plan is structured to preserve Keyera's strong balance sheet and investment grade credit profile, with net debt to adjusted EBITDA 1 expected to be within the company's target range of 2.5x to 3.0x in 2028.

Following closing, Keyera expects approximately $100 million of incremental 2026 growth capital, relative to its previously disclosed 2026 growth capital guidance of $550 million to $625 million, related to funding Keyera's increased share of the remaining capital to complete Zone 4. RBC Capital Markets acted as financial advisor to Keyera on the transaction. Norton Rose Fulbright Canada LLP and McCarthy Tétrault LLP are acting as legal advisor to Keyera.

Scotia Capital Inc. acted as financial advisor to Stonepeak on the transaction. Sidley Austin LLP, Stikeman Elliott LLP, and Goodmans LLP are acting as legal advisor to Stonepeak. Acquisition Financing The acquisition financing plan is designed to preserve balance sheet strength and financial flexibility.

As part of the financing plan, Keyera has entered into an agreement to issue $525 million of common equity through a bought deal offering, before the exercise of any over-allotment option, which is being announced separately (the "Equity Financing"). The purchase price was funded through borrowings made under certain existing credit facilities of Keyera Partnership. All or a portion of the outstanding borrowings under such existing credit facility are expected to be repaid with proceeds of the Equity Financing and through a future debt financing.

Notes: Non-GAAP financial measure. Refer to the section of this news release titled "Non-GAAP and Other Financial Measures Advisory". About Keyera Corp. Keyera Corp. (TSX: KEY) operates an integrated Canadian-based energy infrastructure business with extensive interconnected assets and depth of expertise in delivering energy solutions.

Its predominantly fee-for-service based business consists of natural gas gathering and processing; natural gas liquids processing, transportation, storage, and marketing; iso-octane production and sales; and an industry-leading condensate system in the Edmonton/Fort Saskatchewan area of Alberta. Keyera strives to provide high quality, value-added services to its customers across North America and is committed to conducting its business ethically, safely and in an environmentally and financially responsible manner. About Stonepeak Stonepeak is a leading alternative investment firm specializing in infrastructure and real assets with approximately $88 billion of assets under management.

Through its investment in defensive, hard-asset businesses globally, Stonepeak aims to create value for its investors and portfolio companies, with a focus on downside protection and strong risk-adjusted returns. Stonepeak, as sponsor of private equity and credit investment vehicles, provides capital and committed partnership to grow investments in its target sectors, which include digital infrastructure, energy and energy transition, transport and logistics, and real estate. Stonepeak is headquartered in New York with offices in Houston, Washington, D.C., London, Hong Kong, Seoul, Singapore, Sydney, Tokyo, Abu Dhabi, and Riyadh.

For more information, please visit  www.stonepeak.com . Additional Information For more information about Keyera Corp., please visit our website at www.keyera.com  or contact: Dan Cuthbertson, General Manager, Investor Relations Tyler Monzingo, Senior Specialist, Investor Relations Email: ir@keyera.com Telephone: 1-403-205-7670 Toll free: 1-888-699-4853 For Stonepeak, please contact: Kate Beers / Maya Brounstein corporatecomms@stonepeak.com +1 (646) 540-5225 Non-GAAP and Other Financial Measures Advisory This news release refers to certain financial and other measures that are not determined in accordance with Generally Accepted Accounting Principles (GAAP). Measures such as distributable cash flow, distributable cash flow per share, fee-based cash flow, free cash flow, EBITDA, adjusted EBITDA, fee-based adjusted EBITDA, fee-based adjusted EBITDA per share, fee-based adjusted EBITDA per share compound annual growth rate (CAGR) and net debt to adjusted EBITDA are not standardized financial measures under GAAP or are supplementary financial measures, and, as a result, may not be comparable to similar financial measures reported by other entities.

Management believes that these non-GAAP and other financial measures facilitate the understanding of Keyera's results of operations, leverage, liquidity and financial position. These measures do not have any standardized meaning under GAAP and, therefore, should not be considered in isolation, or used in substitution for measures of performance prepared in accordance with GAAP. For additional information on these non-GAAP and other financial measures, including reconciliations to the most directly comparable GAAP measures for Keyera's historical non-GAAP financial measures, refer to Management's Discussion and Analysis (MD&A) for the year ended December 31, 2025 and for the three months ended March 31, 2026, which are available on SEDAR+ at www.sedarplus.ca and Keyera's website at www.keyera.com .

Specifically, the sections of the MD&A titled, "Non-GAAP and Other Financial Measures", "EBITDA and Adjusted EBITDA", "Dividends: Funds from Operations, Distributable Cash Flow and Payout Ratio", "Adjusted Cash Flow from Operating Activities and Return on Invested Capital" and "Compliance with Covenants" include information that has been incorporated by reference for these non-GAAP and other financial measures.  While fee-based adjusted EBITDA and CAGR for fee-based adjusted EBITDA are non-GAAP or other financial measures that have been previously disclosed by Keyera, fee-based adjusted EBITDA per share and the related CAGR calculation are new metrics that have been disclosed in this news release and therefore, cannot be incorporated by reference to the MD&A. Set forth below is a description and calculation of fee-based adjusted EBITDA per share and related CAGR and other non-GAAP and other financial measures used in this press release. Non-GAAP Financial Measures and Ratios Fee-based cash flow , is a non-GAAP measure defined as cash flows attributable to fee-for-service business.

Free cash flow , is a non-GAAP measure, defined as cash flows from operating activities less capital expenditures. Fee-based Adjusted EBITDA per share , is a non-GAAP ratio that is calculated as fee-based adjusted EBITDA, being the adjusted EBITDA attributable to the fee-for-service business, which includes the following components and assumptions: i) forecasted fee-for-service realized margin (realized margin for the Gathering and Processing and Liquids Infrastructure segments), and ii) adjustments for total forecasted general and administrative, and long-term incentive plan expense, divided by the weighted average number of shares – basic. CAGR for fee-based Adjusted EBITDA per share , is a non-GAAP measure intended to provide information on a forward-looking basis.

This calculation utilizes beginning and end of period fee-based adjusted EBITDA per share, which is a non-GAAP ratio as defined above. For additional information related to fee-based adjusted EBITDA, a reconciliation of fee-based realized margin to the most directly comparable GAAP measure, operating margin for the Gathering and Processing and Liquids Infrastructure segments, and the methodology used to derive Keyera's compound annual growth rate calculations, refer to the sections of the MD&A titled "Non-GAAP and Other Financial Measures". Forward-Looking Information This press release contains certain statements that constitute "forward-looking information" within the meaning of applicable Canadian securities legislation (collectively, "forward-looking information").

Forward-looking information is typically identified by words such as "will", "should", "outlook", "continue", "expect", "intend", "target", "remain", "maintain" and similar words or expressions, including the negatives or variations thereof. All statements other than statements of historical fact contained in this document constitute forward-looking information, including, without limitation, statements regarding expected growth of condensate and NGL production from the Montney and Duvernay resources; the completion of the KAPS Zone 4 construction; the expected benefits and efficiencies of the KAPS interest acquisition, including tax efficiencies and the achievement of system optimizations; the accretive value of the transaction to distributable cash flow per share and the expected improvements in free cash flow; the expected increase in fee-based adjusted EBITDA per share; the company's ability to preserve the strength of its balance sheet; expectations regarding the company's net debt-to-adjusted EBITDA ratio; expectations regarding the company's acquisition financing plan, including closing of the Equity Financing and follow-on debt financing; and the company's ability to deliver long-term growth and value for customers. All forward-looking information reflects Keyera's beliefs and assumptions based on information available at the time the applicable forward-looking information is made and in light of Keyera's current expectations with respect to such things as the outlook for general economic trends, industry trends, commodity prices, and the integrity and the reliability of Keyera's assets.

The forward-looking information contained in this press release is subject to known and unknown risks and uncertainties, including, but not limited to, the risk that the anticipated benefits of the transaction may not be realized, general business, market and economic conditions and other factors that may cause actual results, events, levels of activity and achievements to differ materially from those anticipated in the forward-looking information, many of which are beyond the control of Keyera. Further information about the factors affecting forward-looking information and management's assumptions and analysis thereof is available in Keyera's MD&A for the year ended December 31, 2025 and for the three months ended March 31, 2026 and in Keyera's Annual Information Form available on Keyera's profile on SEDAR+ at www.sedarplus.ca . Management believes that its assumptions and expectations reflected in the forward-looking information contained herein are reasonable based on the information available on the date such information is provided and the process used to prepare the information.

However, it cannot assure readers that these expectations will prove to be correct. Readers are cautioned that the foregoing list of important factors is not exhaustive and they should not unduly rely on the forward-looking information included in this press release. Further, readers are cautioned that the forward-looking information contained herein is made as of the date of this press release.

Unless required by law, Keyera does not intend and does not assume any obligation to update any forward-looking information. All forward-looking information contained in this press release is expressly qualified by this cautionary statement. SOURCE Keyera Corp. View original content to download multimedia: http://www.newswire.ca/en/releases/archive/June2026/17/c3837.html Canada Newswire June 17, 2026 - 1:11 PM PDT News by QuoteMedia www.quotemedia.com