Internet Moves Drive M&A Among Media CompaniesInternet Moves Drive M&A Among Media Companies

Mergers and acquisitions within the media and information industries reached the highest level in five years in 2005, driven primarily by the need to invest in digital technology as the Internet grew in importance, an investment bank says.

Last year saw 525 deals valued at $56 billion across 11 sectors tracked by The Jordan Edmiston Group Inc. Among the media companies that acquired fast-growing online content and delivery channels to offset traditional business lost to the Internet were Gannett, The New York Times, Dow Jones and News Corp.

Also helping boost the M&A market were attractive lending multiples, strong corporate balance sheets and historically low interest rates, the New York investment bank said.

The rise in M&A activity was led by a number of sectors that saw significant gains in the number and value of deals. Those sectors included business-to-business magazines, 10 percent and 42 percent, respectively; directory and reference publishing, 26 percent and 246 percent; exhibition and conferences, 44 percent and 128 percent; marketing and interactive services, 30 percent and 42 percent; newspaper publishing, 7 percent and 72 percent; and online media, 38 percent and 101 percent.

The number of deals among consumer magazines was down 8 percent, but their value shot up 472 percent.

The value of M&A deals last year surpassed the 2000 level of $49.3 billion. The market began its rebound in 2004 when $29.9 billion in deals were completed, Jordan Edmiston said in a report released Tuesday.