Rockwell Collins (COL)  is paying a rich price to grow its commercial aircraft exposure, buying B/E Aerospace (BEAV) for $8.3 billion in cash, stock and debt despite warning signs that new jet demand might have finally peaked. The company says the deal will leave it better positioned for whenever the aerospace cycle eventually turns.

Cedar Rapids, Iowa-based Rockwell Collins is paying upwards of 12 times estimated 2017 earnings before interest, taxes, depreciation and amortization for B/E, which Barclays analyst Carter Copeland in a note says is "at the higher end" of the price range he's seen in recent years. It is Rockwell Collins' second substantial deal since 2013, when the company bought cockpit communications firm Arinc from Carlyle for $1.39 billion.

Shares of Rockwell Collins fell 6.3%, or $5.28, on Monday, Oct. 24, to a close of $79.29, and at first glance the timing of the B/E deal would appear worrisome. Rockwell Collins is doing the largest purchase in its corporate history to gain exposure to a highly cyclical commercial aviation industry that is now eight years removed from its last significant correction.

Company CEO Kelly Ortberg addressed that question head-on in comments to analysts Monday, saying "it's something that we spent a lot of time analyzing as part of our decision here." Ortberg said that the transaction, which would marry Rockwell Collins' avionics, electronics and communications gear with B/E's seats, galleys and modular lavatories, actually would leave Rockwell Collins less vulnerable to a turning cycle.

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