AMAT Acquires AFCO, da. Luna Innovations IPO, nyet.

Semi manufacturing equipment giant, Applied Materials, announced the proposed acquisition of Nanotechnology.com Small Technology Index member and thin-films maven, Applied Films for about $450 million.

This is a good thing for all concerned and it demonstrates the way most small tech companies are going to grow over the next 3-7 years. They are going to be acquired or merged out of existence.

On the other hand, a few investment banks and Luna Innovations of Virginia announced an IPO (normal timeframe expected would be 3-10 months after the February 2006 press release.)

We believe the window of opportunity in 2006 for small tech-related IPOs is long closed and would be surprised to see it come this year . . . we would also not be surprised if it didn't come in 2007 either.

Between Sarbanes-Oxley, a steadily weakening stock, tech and small-cap marketplace, there is very little to recommend an IPO exit strategy into the public markets anytime soon. Note to VCs and bankers: Just because Nanosys couldn't go public in July 2004 is no reason to think the worst is over here in mid-2006.

It isn't.