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HandHeld To Acquire eBaum’s World For $15 Million Cash; Other Payouts Possible

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Another deal from HandHeld Entertainment, which continues to roll up traffic and content. This time the company is picking up user-gen site eBaum’sWorld for $15 million in cash at closing and a possible total of $52.5 million in cash and stock over three years.

The Rochester, NY-based site was founded in 1998 by Eric Bauman and features video, games, jokes, etc. According to HandHeld, the site had about $5.2 million in revenue and $1.6 million net income in 2006. In the last 12 months, the site claims tan average time per user of 10 minutes. Last year, Wired called it “one of the few viral sites actually making money” with annual ad revenues of $10 million. But the same story also highlighted a problem — accusations that Bauman was making some of that money out of “purloined content.”

Financial terms: The financial details are complicated: $15 million in cash when the deal closes, which is expected later this year, $2.5 million in Handheld stock at the closing with an additional $2.5 million in stock if targets are met. Also, possible earnouts of another $15 million in cash and $17.5 million in stock over three years if various milestones occur. This is all based on a multiple of 6X. To finance the deal , HandHeld has an agreement to raise $24 million in debt with $15 million going for eBaum’s World and the remaining $9 million in reserve for future M&A, working capital and fees.

7 Responses to “HandHeld To Acquire eBaum’s World For $15 Million Cash; Other Payouts Possible”

  1. Tony Balogne

    I could give two squirts of my lemonade where ebaum gets their content from.

    Ebaumsworlds is the best Random Media Site on the net hands down. Youtube is the best if you're looking for a specific clip but if you're just surfing and want 5-10 minutes of laughs, the "Top Videos of the day/overall" function on Youtube is horrible! All I want is 10-15 good clips a day and I can't find a better place on the web. I also love how the Ebaums clip comments seem to attract the most idiotic and offensive forum trolls who spend most of their time hurling insults and slander towards Eric and his dad.

    So enjoy your $15M Ebaum, you tool! You're rich b*tch!

  2. I was mentioned in a recent newspaper article. eBaum's stole my photos. They did give me a "by line" and a link to my site after I complained. Of course, had I not stumbled on it by accident (after the images got over 190,000 hits!) I would have received no credit at all.

    I love how they claim that this gets exposure that we never would have otherwise gotten. I'd probably agree except that of course I got no credit until I asked for it. Exposure only helps me if people know its mine. Also, he gets revenue for it. I don't.

    Finally, in the article today, he claims that the stuff is in the "public domain". I guess that copyright notice at the bottom of the page that says "all rights reserved" is too vague for them to understand!

  3. If by user-generated you mean created by users, then taken by that site without permission, then yes, user-generated.

    If you mean created by users, then taken by that site without permission, then yes, purloined content.

  4. What will be interesting to see if eBaum's site traffic keeps up with previous past levels. If so, then HandHeld will have kept his eBaum's traffic stealing scripts in place.