In what they described as a “transformative transaction” to strengthen Canadian “economic resilience,” Calgary-based Keyera Corp announced Tuesday that it has agreed to acquire virtually all Canadian NGL assets owned by Plains All American Pipeline and its parent company, Plains GP Holdings, for $3.75 billion (CD$5.15 billion).
Plains AA will retain NGL assets in the U.S. and all its crude oil assets in Canada. Proceeds from the all-cash sale will be about $3 billion — after taxes, transaction expenses and a potential one-time distribution to unit holders to defray their expenses associated with a what is a taxable event.
After June 30, the Canadian NGL assets will be reclassified on the PAA books as “discontinued operations.”
Willie Chiang, chairman and CEO of Houston-headquartered Plains as a “win-win transaction for both Plains and Keyera.”
Chiang said the deal offers an attractive valuation at 13 times expected 2025 Distributable Cash Flow and establishes Plains as a pure play crude oil midstream and provides Keyera with control of a portion of critical Canadian infrastructure.
The announcement said Plains will concentrate on their crude portfolio, optimization of their capital structure and opportunistic repurchases of their common units.
Advisors were not disclosed in the announcement, but Vinson & Elkins advised Plains All-American on the deal.
The V&E team was led from Houston by partners Caroline Kuehn and Doug Bland, alongside partners Nettie Downs, Dave Oelman, and Scott Rubinsky, senior associate Zach Parker (Austin) and associates Vestita Zumot, Rammy Allouche, Caroline Oakley and Hope Kaady. Other team members include partners Darren Tucker (Washington, D.C.) and Kara Kuritz (Washington, D.C.), counsel Ryan Will (Washington, D.C.), and associate Adam Thomas (Washington, D.C.), partners Ryan Carney, David Peck (Dallas) and Wendy Salinas, counsel Curt Wimberly (Washington, D.C.) and associates Keleigh Carver and Erin Fant; partners David D’Alessandro and Dario Mendoza (Dallas) counsels Missy Spohn (Dallas) and Heather Reynolds Johnson (Dallas) and associate Reagan McGinnis; partner Becky Baker and senior associate Peter Goetschel; partner Matt Dobbins and associate Ryan Vanderlip (Austin) partner Caitlin Turner (New York), counsel Noelle Alix and associates Hayley Johnson (New York), Ben Wilken (New York), Taylor Kopriva, and Lucy Briody; partner Sarah Mitchell (Dallas) and counsel Alexander Baker (Dallas) partners Randall Johnston (Washington, D.C.) and and Joyce Adetutu, associate Claire Connor (Washington, D.C.) partner Suzanne Clevenger associate Ryan Hoeffner and counsel Rajesh Patel. Unless noted otherwise, all V&E lawyers above have offices in Houston.