San Francisco - HandHeld Entertainment, a maker of portable media players and operator of entertainment websites, announced on Thursday that it will acquire eBaum's World, an entertainment site that offers user-generated videos, games, jokes, photos and other content, for $17.5 million.

In addition, HandHeld may pay earn-outs of up to an additional $32.5 million over three years to the owners of eBaum's World.

To help fund the deal, HandHeld said it has entered into an agreement to sell $24 million of three-year convertible debentures, of which $15 million will go towards its acquisition of eBaum's World, while $9 million will be used for future mergers and acquisitions, working capital and fees.

Founded in 1998, eBaum's World generated $5.2 million in revenue and $1.6 million in net income during 2006; the company said it served more than 2.5 billion unique page views and video streams over the last 12 months.

With the acquisition, San Francisco-based HandHeld said its ZVUE network of entertainment sites will now count between 14 million and 19 million unique visitors per month, and deliver nearly 3.5 billion page views and video streams annually.

Related Links:
http://biz.yahoo.com/bw/070802/20070802005444.html?.v=1

http://www.hheld.com

http://www.ebaumsworld.com