SiliconBeat

Last week, we cited a study from Renaissance Capital that showed that IPOs still did well in the third quarter despite the nervous market this summer. And the IPO market is poised to have a big fourth quarter.

Not so for mergers and acquisitions.  

According to a report released today by Brenon Daly, a financial analyst at The 451 Group, “overall spending on tech and M&A in the July-September period was cut in half from a year ago, plummeting from $99 billion to $52 billion.” It’s even worse when consider there was $255 billion spent on tech and telecom deals in the previous three months.

Ouch.

The culprits? Those buyout firms. They spent more than half the money on all the tech and telecom deals in the first six months. But this summer, their spending dropped to $7 billion compared to $44 billion for the same quarter one year ago.

This didn’t exactly inspire companies to go bargain hunting. Companies only spent $45 billion in the third quarter on tech and telecom acquisitions, compared to $55 billion last year.

And Daly’s take on all this from his report:

“Who would have thought that the all-powerful tech buyout barons could be knocked out of the market by a bunch of over-extended homeowners? And yet, that’s what happened in the third quarter, as LBO shops found that once-plentiful cheap debt – their currency of choice – had all but dried up because of this summer’s sub-prime mortgage meltdown.”