HandHeld Entertainment, Inc., a global digital entertainment company, announced that it has entered into a definitive agreement to acquire eBaum’s World, Inc., one of the Internet’s premier online entertainment sites, offering user-generated videos, games, jokes, photos and other content.
Founded in 1998, eBaum’s World is one of the oldest and most successful user-generated content sites in the world, generating approximately $5.2 million in revenue and $1.6 million in net income before income taxes in 2006. During the last 12 months, eBaum’s World served more than 2.5 billion unique page views and video streams, with an average time on site per user visit of more than 10 minutes. The company has relationships with such leading media companies as AOL Video, Facebook, FOX Mobile and others.
Under the terms of the acquisition, which is expected to close later this year, HandHeld will pay $17.5 million for eBaum’s World at closing, including $15.0 million in cash, $5.0 million in common stock, which is subject to a $2.5 million one-year hold-back based on achievement of certain financial targets. In addition, HandHeld may pay earn-outs of up to $32.5 million ($17.5 million in stock and $15.0 million in cash) over three years to the owners of eBaum’s World, dependent on the achievement of certain financial and operational milestones of the purchased business.