Evolution has officially terminated its merger agreement with Galaxy Gaming, a company specializing in table games and casino technology. The announcement came on Tuesday, following comments from CEO Martin Carlesund last week indicating that the merger was not essential for Evolution's business operations.
As part of the termination, Evolution will pay Galaxy Gaming a fee of $5.2 million. Despite this development, Evolution confirmed its commitment to maintaining a collaborative relationship with Galaxy Gaming under their existing business arrangement. Earlier in 2023, both companies extended their licensing agreement for another ten years.
In a press release regarding Evolution’s Q2 financial results, Carlesund hinted at the termination after the deal's closing deadline passed on Friday. He stated, "Two years have passed, and Evolution has spent significant time, effort, and resources handling the rather large amount of administration required to close this acquisition. Galaxy is a great company; however, due to its size, the transaction is not significant for Evolution. The outcome has no material impact on our existing business, our US operations, or our long-term ambitions."
The merger, which was first announced in July 2024, proposed that Evolution would acquire all outstanding shares of Galaxy Gaming in a transaction valued at approximately $85 million. However, Galaxy Gaming revealed on Monday that it had not yet secured two necessary gambling regulatory approvals. In light of this situation, Galaxy indicated that it was exploring options, including requesting an extension to the merger's deadline or terminating the agreement entirely. Ultimately, Evolution chose to proceed with terminating the deal.
In its Q2 report, Evolution reported a 1.2% decrease in net revenue year-on-year, totaling €517.8 million ($591.4 million), primarily due to a 3.7% decline in revenue from the Asia region. The company also saw its EBITDA decline to €341 million, down from €345.3 million during the same quarter of FY25.
Despite the revenue and EBITDA drops, Evolution experienced growth in Europe, with a 3.5% increase in revenue compared to the previous quarter. Latin America also saw a significant year-on-year rise of 26.3% in revenue. Carlesund expressed optimism about the company’s trajectory, remarking, "Revenue and margin are moving in the right direction compared to the first quarter; cost control remains strong, cash flow is improving, and we continue to expand in key markets while executing on our product roadmap. The road is almost never straight, but what matters is that we are moving forward. Some curves are harder than others, but they can also be fun. And the same goes for Evolution."
