A big contributor to the deal, though, and something investors likely understand, is that this is a classic example of extreme tradeoffs. Harris has proven that it can grow revenue and earnings at a nice clip in a competitive space, even if that means operating cash flow flatlines, but in the case of L3, that company has struggled in recent years to make any headway. L3 is essentially giving Harris a good deal on its business in the hopes that Harris can work their magic the same way they have for their own firm, in an effort to create greater shareholder value in the long run. Certainly the market gets this and, because of the track record Harris boasts, it believes this is a real possibility that’s worth paying for.
https://seekingalpha.com/article/4211940-harris-l3-technologies-merger-tradeoffs