After California Resources (CRC) announced an agreement to acquire Berry Corp. (BRY) in an all-stock transaction valued at $717M, including the assumption of net debt, Roth Capital analyst Leo Mariani thinks this acquisition “makes a lot of strategic sense” given the overlap and adjacency of Berry’s California assets and the recent legislative move in California to reopen oil and gas well permitting in Kern County. California Resources expects to realize $80M-$90M of synergies from the transaction within 12 months of the close, but the firm suspects that the synergies may be higher than this based on Berry’s current cash G&A levels, says the analyst, who has a Buy rating and $63 price target on California Resources shares.
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