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.