Existence of Size Effect on Transactions with Non-publicly Traded Shares in Selected Sectors in European Countries

This paper examines the effect of company size on transaction multiples from European Union. One of the objectives of this paper is to confirm the thesis that larger companies are perceived by investors as less risky and are therefore bought by investors for higher multiple than smaller companies. In addition to the effect of company size on the size of the transaction multiple, this paper also researches the existence of the size effect in the Services, Industrial products and services, Consumer, Computer software, and Leisure sectors as the sectors with the most realized transactions. In this paper were confirmed both objectives, i.e., that investors are willing to pay higher multiples for larger companies compared to smaller companies which was also confirmed within the sector Services, Industrial products and services, Consumer, Computer software, and Leisure.