Mad Money

Cramer: Opportunity ahead in Timken spinoff?

Could Timken 'Steel' the show?

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

Ward "Tim" Timken calls it a 100-year old start-up. What does Jim Cramer have to say about the new TimkenSteel spinoff?

Headquartered in Ohio, Timken has been in business for more than a century. The company was founded by Henry Timken in 1899 as a maker of roller bearings, which aided freight wagon operators and their mules.

Since that time, "Timken's steel operations have provided the raw material for the company's bearings and related products. And it also sold steel to other companies," writes the Akron Beacon Journal.

It's been that way for as long as anyone remembers. However all that changes this week.

fotog | Getty Images

"Due, in part, to pressure from a pair of big activist investors, Timken has agreed to spin off its engineered steel business," Cramer explained.

As of July first, will trade under the ticker TMST, with every Timken shareholder getting one share of the new TimkenSteel for every two shares of Timken.

As a new and independent company, TimkenSteel will be a leading maker of high quality alloy steel bars, seamless mechanical tubing, and other precision components with $1.7 billion in sales.

Looking at potential upside, Cramer said, "If things get significantly better around the world it could be huge for TimkenSteel." And, as Cramer has so often said in the past, he believes it's just a matter of time before the global economy starts percolating again.

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In case you're wondering, the remaining Timken will continue to make bearings and other signature products. Rich Kyle, the company's new CEO and president noted that Timken has actively transformed itself in recent years to better leverage growing markets. "The spinoff of TimkenSteel is the last step in a multiyear transformation," Kyle said.

All told, Cramer likes the opportunity. " I gotta tell you I like them both."

Call Cramer: 1-800-743-CNBC

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