If ever there was a year of two halves, 2007 was it.

Remember the good times? In early February, Blackstone completed the biggest buyout since RJR Nabisco with its acquisition of Equity Office Properties. Just weeks later, Kohlberg Kravis Roberts one-upped Blackstone with a $45 billion buyout offer for the utility TXU.

Money was cheap, the bidding was intense, and the premiums were huge. The slowing housing market seemed to be a distant rumble.

But somewhere around the middle of a Hamptons summer rental, everything changed. Two Bear Stearns hedge funds made some noise about losses in June. In July, Standard & Poor’s started downgrading. By August, the credit markets had officially turned upside down.

The fun was over—or so it seemed.

While deals didn’t come to a screeching halt, their metrics changed dramatically during the course of the year. By November, the average global mergers and acquisitions deal size had shrunk 6 percent from the peak month of April, and the number of deals fell 11 percent, according to Dealogic.

In private equity, the numbers were even worse. Average deal size in November was down 68 percent from the peak month of May; the number of deals had fallen by half.

Despite the tough second half, there shouldn’t be any tears in dealmakers’ champagne glasses this New Year’s Eve. Total deal volume set a record in 2007—by the end of November, $4.5 trillion in global merger volume had been announced, up 28 percent from the same period in 2006, which itself was a record year.

 
Record volume and value were not the only hallmarks of the year, however. The natures of some 2007 deals will also leave their marks. Not all of Portfolio.com’s Deals of the Year were successful, but all are memorable.