Why do you add minority interest (noncontrolling interest) to enterprise value?

It comes down to consolidation and consistency. If a company owns more than 50% of a subsidiary, say 70%, accounting rules require it to consolidate 100% of the subsidiary's revenue, EBITDA and balance sheet. The 30% owned by outside shareholders is shown as noncontrolling interest in equity, and their share of earnings is subtracted near the bottom of the income statement.

So the parent's reported EBITDA includes all of the subsidiary's EBITDA, including the 30% that belongs to someone else. The parent's market capitalization, though, only reflects the parent's own 70% stake. If I divided equity value plus debt minus cash by that EBITDA, the numerator would be too small for the denominator and the multiple would look artificially low. Adding noncontrolling interest puts the outside owners' 30% into EV, so both sides cover 100% of the subsidiary.

The mirror case is an equity-method investment, where the company owns a minority stake without control. Its revenue and EBITDA are not consolidated, only its share of net income, so I subtract the value of the investment from EV for the same reason.