Resuming Coverage at Outperform Following Equity Deal for 50% KAPS Acquisition

Research evidence excerpt

Resuming Coverage at Outperform Following Equity Deal for 50% KAPS Acquisition

June 22, 2026 | 10:29 ET~

Keyera

KEY-TSX Rating Price: Jun-22 Target Total Rtn Energy Infrastructure

Outperform $56.55 $65.00 19%

Ben Pham, CFA Analyst

ben.pham@bmo.com (416) 359-4061

Alexander Donovan, CPA Associate

Resuming Coverage at Outperform Following Equity alex.donovan@bmo.com (416) 843-7083

Legal Entity: BMO Nesbitt Burns Inc.Deal for 50% KAPS Acquisition

2YR Price Volume Chart

Bottom Line: 65

KEY's acquisition of remaining 50% interest in KAPS is highly strategic, accelerates near- 60

term growth, and increases cash flow quality at a reasonable price. The anticipated 55 50

accretion is modest at low-single digit (no change in $65 target), but further upside is 45 87

available on additional contracting opportunities. In our Cdn. midstream coverage, KEY 40 54

35 2offers the best leverage to rising WCSB production and one of the highest growth rates 3 1

at attractive relative valuation (~10% EV/EBITDA discount). Maintain Outperform rating 30 Dec Jun Dec Jun 0

and Top Pick designation. LHS: Price (C$) / RHS: Volume (mm) Source: FactSet

Company Data in C$

Key Points Dividend $2.16 Shares O/S (mm) 293.4

KAPS consolidation highly strategic. KEY has acquired the remaining 50% of KAPS it Yield 3.8% Market Cap (mm) $16,592

does not already own for ~$1.215B from Stonepeak, taking full ownership of a strategic P/BV 5.1x Net Debt (mm) $3,796

NGL system connecting Montney and Duvernay NGL and condensate production BMO Estimates in C$

to downstream markets. The asset is ~75% contracted for 12 years, with KEY's NGL (FY-Dec.) 2025A 2026E 2027E 2028E

infrastructure/fee-based EBITDA increasing to 52%/74% (vs. 49%/71%) and accelerating

CFPS $3.72 $4.40 $5.41↑ $5.82↑

near-term growth.