The companies aren’t disclosing details except to note that it’s a cash and stock deal. Smule has more of the former because it just raised a $12 million funding round, and some of that is being transfered directly to Atlanta-based Khush.

The logic here is pretty simple: The two companies can combine tech, and just as important, they can combine their installed base — together they’ve moved 35 million apps — to promote/distribute more apps.

All of that activity, by the way, remains confined to Apple and its iOS ecosystem. Neither company makes apps for Google’s Android operating system, pretty much for the same reasons that Smule co-founder Jeff Smith explained to me more than a year ago.

If you want to raise a skeptical eye, it would be perfectly fair to point out that both companies traffic in novelty items that rely on gimmicks like “auto-tuning” people’s voices. And that while both companies insist that they’re really trying to make music-creation a social experience, you probably don’t want to hear most of your friends’ attempts to make music.

But who cares? If people like the apps, they like the apps. For insight into the brains that make the apps popular, check out this excellent profile of Smule’s chief brainiac Ge Wang, via the New York Times magazine’s Rob Walker.

You can also see Wang, Smith and their new employees Prerna Gupta and Parag Chordia in this clever announcement video; below that is the interview I shot with Smith back in March 2010.