After the close Keyera (KEY) announced a splashy $5.2B acquisition of Plains All American Pipeline’s Canadian NGL business at 7.8× 2025 EBITDA - 6.8x after expected year one synergies, well below where it trades today.

Given the proximity of Plains’ assets to Keyera’s existing footprint, the company expects to drive $100M of cost savings and operational enhancements, driving near-term cash flow accretion in the mid-teens.

Longer term, the company expects to unlock additional benefits - as a favourable outlook for natural gas production in Alberta bodes well for infrastructure names that benefit from higher volumes.

The deal is funded by a $1.8B bought deal equity financing, with the balance landing on a new credit facility - a structure that should keep leverage in-line with the company’s 2.5-3.0x leverage target, given the expected ~50% EBITDA pick-up.

All-in, the deal looks solid and comes at the right time, with Canada turning its focus on energy independence. With natural gas well-positioned for the continued data center buildout, KEY’s new assets could have a much higher price tag in the future.