Perion Network, the Nasdaq-listed Internet software company mostly known for its IncrediMail and Smilebox brands, has acquired fellow Israeli consumer Internet company SweetPacks, maker of the popular SweetIM application.

Perion will cough up $10 million in cash and 1.99 million Perion shares initially, and follow up with a second payment of $7.5 million in cash 12 months after closing.

A third, conditional payment of $7.5 million in cash is due 18 months after closing, subject to certain milestones and achievements, bringing the total potential purchase price to $41 million.

Says Perion CEO Josef Mandelbaum:

“I am very excited about this powerful acquisition that builds off of our great Q3 numbers and accelerates our growth rate. In addition, the acquisition significantly increases our revenues, nearly doubles our profits and expands our profit margins enabling us to exceed $100 million in revenue in 2013.”

Indeed, SweetPacks generated $29.7 million in revenues from its apps in the 12 months ended September 30, 2012.

It claims more than 150 million users worldwide.

Mandelbaum says the acquisition of SweetPacks adds 22 million new users, creating a “larger and more profitable company”.

SweetPacks CEO Nadav Goshen will become Perion’s new COO. Before he joined SweetPacks, Nadav served as Deputy CEO for Babylon, also a publicly listed company.

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