Israel’s IncrediMail, which develops and markets email and other high-end personal desktop software, paid $25 million up front for Smilebox, a US company that develops consumer-focused photo sharing and scrapbook creation tools. IncrediMail will pay an additional $15 million if the acquisition hits performance milestones.

IncrediMail CEO Josef Mandelbaum said in a statement that the purchase of Smilebox allows the company to diversify its product portfolio and increase its premium subscription base. Smilebox lets users turn their photos into electronic greeting cards, scrapbooks, and photo albums.

Smilebox was founded in 2005, and is based in Redmond, Washington.

IncrediMail was founded in 1999 by cousins Yaron and Ofer Adler, and is managed by CEO Mandelbaum. It is one of Israel’s top web success stories and has offices in Tel Aviv and New York.

IncrediMail’s flagship product is software for creating entertaining emails. They’re the company behind the hundreds of millions of emoticons, animations, 3D effects and sounds that jazz up e-mails.