Innovation Interactive announces management buyout

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Search-centric digital marketing company Innovation Interactive has completed a management-led buyout from its parent company, Livedoor Japan.

The buyout was funded by Innovation Interactive's management team and employees, and backed by ABS Capital Partners, an investor with $1.5 billion under management. The terms of the deal were not disclosed.

"We are capitalizing on the shift of media dollars online to finally follow the eyeballs, said Will Margiloff, CEO of Innovation Interactive. "Search is going to continue to grow in importance as a marketing vehicle, with auctions as a dominant pricing/optimization vehicle for a large portion of all forms of digital media.

"Today, current agencies do not have the technology, training, entrepreneurial culture or compensation systems to compete effectively in this environment," Mr. Margiloff said. "That's what we have been bringing to the table for clients like NBC Universal, MTV Networks, H&R Block, Saks and agencies like Digitas, Optimedia, Beyond Interactive and more, and now we can extend the offerings even further."

Innovation Interactive has 170 employees in New York, Atlanta and Chicago.

Innovation Interactive's divisions and solutions include:

--360i: A search-centric agency that provides large brand marketers with a combination of digital media strategy, client service and technology to achieve results via search engines and other auction and brand based online media.

--SearchIgnite: An auction-based media management technology providing the platform for advertising agencies and Fortune 1000 companies that want to manage their media internally.

--The Innovation Interactive Network: A performance advertising network of proprietary and third party content sites and direct navigation domains that provides advertisers - both directly and through their agencies - with access to a vast audience using both text and display advertising.

"The M&A activity surrounding our industry showcases the value for our company," Mr. Margiloff said. "With GoogleClick, Yahoo/Right Media and Microsoft/aQuantive, the landscape gets even more complicated, and yet it clearly shows our value as search-centric digital marketing specialists to help our clients navigate this ever-changing digital media ecosystem."

Since its launch, the company has capitalized on the shift in marketing dollars online combined with explosive growth in auction based media. The company's digital assets are well positioned, evidenced by the massive growth in search marketing and the expanded use of auction based media by Google, Yahoo and Microsoft as a tool to drive advertising across search, display and online video.

"All three of our major brands - Innovation Interactive, 360i and SearchIgnite - were founded by entrepreneurs that found voids in the digital marketing industry and developed innovative solutions to fill those voids, to serve as strategic digital marketing partners to our clients," Mr. Margiloff said. "As we look towards the future, we plan to enhance the awesome entrepreneurial culture that got us to where we are today by delivering even more innovative services to our clients and fuel innovation through both technology R&D and emerging media."

Innovation Interactive's management team, which includes Mr. Margiloff, Bryan Wiener and Scott Levine, will continue to run the company. Will Margiloff and Bryan Wiener will be joined by Ralph Terkowitz and Deric Emry, general partners at ABS Capital on its Board of Directors.

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

"We wanted an opportunity to expand beyond our fantastic organic growth and invest in new opportunities to further our strategy as a search centric digital marketing services firm," Mr. Margiloff said. "We had a number of options in terms of ownership - being part of a larger organization would only stifle our ability to be flexible and innovate. We firmly believe that an independent company with strong backing is in the best position to innovate on behalf of their clients."

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