When one company buys another it has to assume it's debt. Enterprise value = equity + debt - cash on hand (and other adjustments sometimes) So if a company ha

When one company buys another it has to assume it's debt. Enterprise value = equity + debt - cash on hand (and other adjustments sometimes) So if a company has financed its growth with debt, you still have to pay for that if you're acquiring them so it adds to the valuation.