Venture-backed mergers and acquisitions (M&As) and initial public offerings (IPOs) activity in the U.S. during the first quarter of 2008 fell to $8.2 billion, the lowest quarterly total since the fourth quarter of 2005, according to the Quarterly U.S. Liquidity Report released today by Dow Jones VentureSource.

Report findings indicate just 80 M&A transactions completed in the first quarter at a rough value of $7.8 billion in liquidity, compared to $10.2 billion generated from 105 M&As within the same time frame of 2007. Only six IPOs were issued, raising a modest $392 million, posting a 67% decline from the $1.2 billion raised across 13 IPOs in the first quarter last year.

“The first place that venture capital investors will feel effects from the broader financial markets is in the liquidity market, and we’re certainly seeing the turbulence and economic uncertainty constrain exit opportunities for private companies right now,” said Jessica Canning, global research director for Dow Jones VentureSource. “In addition to a tight IPO market, we’re also seeing a significant impact on acquisition prices, as the median amount paid for a venture-backed company in the first quarter was just $63 million, down from $90 million last year.”

By the Numbers: M&As

The biggest first quarter deal was Dell’s $1.4 billion acquisition of Equalogic, a New Hampshire-based data-storage company. Sun Microsystems’ followed with a $1 billion purchase of of open-source database company MySQL.

The majority of M&A capital was raised by information technology (IT) companies whose transactions generated more than $6.1 billion in liquidity, opposed to $6.4 billion raised by 79 M&A transactions during the first quarter of 2007. Software companies led this sector completing 29 M&A transactions worth nearly $2.3 billion. Health-care company M&A’s dove 42 percent to $1.1 billion; and, only $328 million was raised in the business, consumer and retail sector making it the lowest quarterly total since 2003.

Although purchase prices were smaller, the media amount of capital raised prior to M&As rose to $24.8 million and the median number of years between initial equity funding and liquidity now stands at a record seven years.

By the Numbers: IPOs

CardioNet of San Diego was among the six health-care company IPOs, who collectively raised a $164 million. Just two venture-backed IT companies went public in the fourth quarter, raising $228 million; the largest belonging to financial analytics and wealth management software maker RiskMetrics Group of New York City who garnered $174 million in its January IPO.

First quarter IPOs raised a total of $53 million, down 34 percent from the $80 million this time last year. Pre-IPO capital raised amounted to $56 million, but the median time to IPO stretched to 8.3 years.

A separate report on first quarter activity in 2008 was released by Thomson Financial (NYSE: TOC; TSX: TOC) and the National Venture Capital Association (NVCA) this week. See link to previous story about their findings.