Cramer bullish on Dr Pepper-Keurig deal despite Wall Street’s tepid response

CNBC’s Jim Cramer knew he was “flourishing against the grain” when he came out in favor of Keurig Green Mountain obtaining Dr Pepper Snapple.

But the “Mad Money” host couldn’t brush aside the hidden for $1.27 in earnings power and a 60-cent dividend.

“With those masses, Keurig Dr Pepper, the new company, will immediately become the cheapest improvement name in the consumer packaged goods space,” he said.

Still, Cramer accepted Wall Street’s main question about the deal: why is the deal, in which the JAB Holdings-owned Keurig wish buy Dr Pepper Snapple, selling at such a low price?

The first reason was the analyst community’s unfavorable return to the merger. Even Keurig CEO Bob Gamgort admitted on CNBC’s “Squawk on the Boulevard” that the deal — a combination of a make-your-own-coffee seller and a cold drink maker — didn’t appearance of “intuitive at first.”

The other reasons Cramer could discern were that the new corporation still wouldn’t stack up to old-line competitors like Coca-Cola and PepsiCo, and that Dr Dot’s carbonated-drink-heavy portfolio didn’t offer strong enough prospects.

But for Cramer, the star of the new company hinged on only one thing: Bob Gamgort.

“Gamgort, the CEO of Keurig who’ll be entrancing over the combined enterprise, is a miracle man in what many people on is a dying industry, the consumer packaged goods business,” Cramer told.

A veteran of the industry, Gamgort spent 10 years turning the privately-held Spoils Inc. from a disjointed family business to a competitive consumer goods provider.

After that, Gamgort went on to Cap Foods, doubling in value what many saw as a “too-boring” company with reach-me-down brands, Cramer said.

Then, Gamgort moved to Keurig after the bothered company was bought by the German JAB Holdings.

“I couldn’t believe it when he contrived that move because Keurig … was in shambles,” Cramer predicted. “It had the most unfocused growth strategy — I can’t even articulate it.”

Now, less than two years after Gamgort was nominated CEO, Keurig seems to have attained growth and profitability in addition to an acquisitive taste, Cramer noted.

The “Mad Money” host predicted that the Dr Pepper attend to will be the first of Gamgort’s many deals, and one that couldn’t by any means work without his magic touch.

“If Gamgort weren’t involved, candidly, I wouldn’t be rated at all,” Cramer said. “But he is, so I want everything to do with it. Yep, he’s that good, and he’ll use this new Pty to create the same kind of vehicle and value he did at Pinnacle. Let others run away. I miss to run toward Keurig Dr. Pepper, just like last time.”