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Media Veterans Brett Bouttier, Betsy Morgan, Jeff Berman Form Venture Targeting Consumer Brands (EXCLUSIVE)

Private equity-backed Magnet Companies plans to acquire and develop direct-to-consumer brands

A trio of seasoned media and tech execs — Betsy Morgan, Brett Bouttier and Jeff Berman — has teamed up to form Magnet Companies, a holding company looking to buy and build direct-to-consumer companies and maximize their reach, engagement and revenue.

Magnet Companies has secured “significant backing” from a multibillion-dollar private-equity fund based in New York, according to Bouttier, who most recently was president of AwesomenessTV. He declined to say how much money Magnet has at its disposal, nor would he reveal the name of the PE fund.

So what is Magnet’s play, exactly? The partners say they’re focused on the intersection of “content, community and commerce”: The idea is to assemble and operate a portfolio of consumer-oriented properties that generate multiple streams of revenue.

“We’re not running around town as investors,” Bouttier told Variety. “We are looking at it as an operating fund. We’re looking to go out to build and buy things.”

The three Magnet founders have résumés that cut across digital media.

Morgan was the first CEO of the Huffington Post and headed Glenn Beck’s TheBlaze, after 10 years at CBS Interactive; most recently, she was executive in residence at investment bank LionTree Advisors. Bouttier, prior to Awesomeness (which was just acquired by Viacom), led Warner Bros. Television Group’s digital division and was part of the team that launched TMZ. Berman most recently was executive in residence at VC firm Greylock Partners. Previously, Berman was president of Whalerock Industries, the production company that has developed apps and digital properties with celebs including the Kardashian and Jenner sisters, Ellen DeGeneres and rapper Tyler, the Creator; before that, he ran the NFL’s digital-media businesses and led Myspace’s sales and marketing.

Magnet’s partners plan to recruit talent and content creators to build new businesses, and they also are looking to acquire existing brands that can be “modernized” to better engage consumers in media consumption and ecommerce.

“Chaos is opportunity. There’s a certain amount of chaos in the media industry today,” Morgan said.

In terms of segments Magnet Companies is looking at, Bouttier was cagey but he pointed to news and information, music, sports, and fashion as examples: “These are all big areas where there are new opportunities for brands to tap into a modern consumer behavior.” He said the partners are currently in discussions with a number of potential target companies.

Magnet is looking at tapping pure-play media brands as well as “product-driven” consumer brands, Bouttier added. “There’s never been a better time to build new brands,” he said. “You can literally become part of the new behavior of people’s lives.”

Magnet’s holding-company structure and its focus on next-generation consumer brands sounds somewhat like what Jeffrey Katzenberg is doing with WndrCo in targeting mobile entertainment, or like Peter Chernin’s Chernin Group and Barry Diller’s IAC.

Bouttier said Magnet Companies won’t be a passive investor. “The three of us will be very hands-on operators,” he said. Magnet intends to share resources and the expertise of the founders across its subsidiaries, providing its portfolio companies with capabilities often unavailable to early-stage businesses.

Bouttier and Berman are based in L.A., while Morgan is located in New York City. David Hernand of law firm Paul Hastings negotiated the company’s financing and Ziffren Brittenham’s Bryan Wolf acting as legal adviser to the partners. For now, Magnet has a placeholder website up and running at magnetcompanies.com.

As for the name of the venture, Magnet Companies is betting it can fulfill the magnetic implications of its moniker: “One of the things all three of us have learned consistently is, when you put people who know how to build together with the financial resources to do it, it attracts the best talent,” said Bouttier.

Pictured above (l. to r.): Brett Bouttier, Betsy Morgan, Jeff Berman

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