Elevation Partners Status: Buying More Facebook Stock

   By Daniel Hausmann 
   Of DOW JONES LBO WIRE 
 

Private equity firm Elevation Partners has acquired an additional five million shares in social networking site Facebook for $120 million.

A person familiar with the situation confirmed a report by the TechCrunch blog that the media and technology investor had bought more shares on the secondary market. Facebook, which is private, ultimately has a yea or nay on who its investors are.

Facebook officials couldn't be reached for comment. Elevation spokesman Ron Low declined to comment.

The latest stock purchase pegs Facebook's valuation at over $23 billion. Based on the $9 billion valuation as of last November when Elevation invested $90 million for 2.5 million shares, the firm, on a blended basis, has acquired 7.5 million shares at a company valuation of $14 billion, the source confirmed.

Elevation decided to buy in again reflecting on Facebook's large growth rate, according to the source. User count has gone to over 500 million from 325 million when the firm first invested. The firm feels it knows the company well and it's a Google-esque opportunity, according to the source.

At the firm level, it also means Elevation is further along in fully investing its fund. LBO Wire reported last week that the firm was seeking a one-year extension from LPs on its $1.9 billion debut fund. Now, that fund, which was raised in 2005, has a little over $100 million to invest.

As for plans for that remaining capital, the firm is looking at smaller investments, like the ones it has made in Facebook and online review site Yelp, rather than massive restructurings like the soon-to-be-exited Palm Inc. (PALM) and Forbes Media LLC.

Elevation recently laid off a handful of staffers after the deal was secured to sell Palm to Hewlett-Packard Co. (HPQ) in a $1.2 billion transaction.

The firm has also hired managing directors Avadis "Avie" Tevanian and Rajiv Dutta in the past 12 months and anticipates a possible fund-raising campaign in early 2011 if the market rebounds.

(Dow Jones LBO Wire covers news about private equity.)

-By Daniel Hausmann, Dow Jones LBO Wire; 212-416-2039; [e-mail]