• by Tameka Kee , June 4, 2007

Innovation Interactive has taken back its power and completed a management-led buyout from its parent company, Livedoor Japan. The marketing services firm houses on online ad network, as well as better-known digital brands such as search-focused agency 360i and bid-management technology company SearchIgnite.

Although terms of the deal were not disclosed, the buyout was funded by Innovation Interactive's management team and employees, in addition to investments from private equity shop ABS Capital Partners.

"The recent mergers-and-acquisitions activity has really complicated the marketplace," said Will Margiloff, CEO and founder, Innovation Interactive. "We think advertisers will start looking for nimble, independent agencies that can navigate the space for them, and we saw the buyback as a huge strategic advantage."

Although parent company Livedoor Japan had no operational responsibilities, according to Margiloff, operating independently will help Innovation Interactive stake its claim.

"We're personally vested in growing a long-lasting business," he said, "which means maximizing results for customers across our entire suite of solutions."

The company's best-known division may be 360i, the search-centric digital agency that serves clients such as NBC Universal and Scripps Network.

But through SearchIgnite, an auction-based media management platform, and the Innovation Interactive ad network, the company has a mix of ROI-based businesses that may be attractive to marketers as they shift more of their ad dollars online.

"Innovation Interactive is a great example of the kind of company we look for as investors," said Ralph Terkowitz, general partner at ABS Capital Partners. "And we look to the team to continue to capitalize on the growing demand for their offerings."

There are some 170 employees under Innovation Interactive's umbrella, with offices in New York, Atlanta, and Chicago.

Innovation Interactive's management team, headed by Margiloff, Bryan Wiener and Scott Levine, will continue to run the company. Terkowitz and Deric Emry, general partners at ABS Capital, will join the board of directors.

ABS Capital specializes in growth companies and has an investment pool of $1.5 billion.

Savvian Advisors LLC acted as exclusive financial advisor to Innovation Interactive. RBC Capital Markets acted as financial advisor to Livedoor Japan.

Digital M&A activity has been heated in the past few months, with both ad networks and search marketing agencies drawing particular interest.