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Cramer: Pirate’s Booty for the Portfolio?

Thursday, 20 Jun 2013 | 6:47 PM ET
B&G Foods CEO: New Products Across the Board
Thursday, 20 Jun 2013 | 6:45 PM ET
B&G Foods CEO David Wenner discusses in what ways his products are becoming healthier, whether his company is taking a breather from acquisitions and the innovations within his brands.

(Click for video linked to a searchable transcript of this Mad Money segment)

Sometimes companies can create a treasure trove of value simply by making a strategic acquisition.

And few acquisitions appear to be more strategic than the $195 million deal inked by B&G to acquire Pirate Brands, and it's line of natural snacks which includes the popular Pirate's Booty.

The deal is expected to bolster B&G's presence in the natural snacks market, an area of retail that's growing rapidly as more people seek out healthier food alternatives.

Although reports had suggested the purchase price was at a higher valuation than what B&G paid for other companies in the past, Cramer's comments suggested the money was well spent.

S-cphoto | E+ | Getty Images

"B&G is a master of buying smaller brands and giving them the support they need to grow, and this Pirate's Booty deal will be immediately additive to the company's earnings and its cash flow," Cramer explained.

In what Cramer can only view as a vote of confidence from the Street, "On the news, B&G jumped from $29 and $31, a 6.8% gain, and despite the latest sell-off, the stock has held its ground," Cramer said.

Considering most acquirers fall after an M&A announcement, the price action speaks volumes to Cramer.

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"There are some companies in the market that can create tremendous value via acquisitions," said Cramer. "In this case, not only did the stock of the target go up, but so did the stock of the acquirer. That's a fabulous dynamic."

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