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, who noted the agreement was not crucial for Evolution’s business. As part of the termination, Evolution will pay Galaxy Gaming a fee of $5.2 million.
Despite ending the merger, Evolution assured that it would maintain its existing business relationship with Galaxy Gaming. Earlier this year, the two companies extended their licensing agreement for an additional ten years.
Carlesund suggested an announcement regarding the termination had been anticipated after the deal's closing period expired last Friday. In a press statement, he elaborated, "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."
Initially announced in July 2024, the acquisition was set to involve Evolution acquiring all remaining shares of Galaxy Gaming for approximately $85 million. However, on Monday, Galaxy Gaming revealed that it had not yet received two final gambling regulatory approvals needed to complete the merger. The company mentioned that it was reevaluating its options, including requesting an extension to the closing deadline or terminating the merger entirely.
In light of these developments, Evolution has chosen to move forward without the merger.
In its quarterly report for Q2, Evolution reported a 1.2% year-on-year decline in net revenue to €517.8 million ($591.4 million), primarily driven by a 3.7% drop in revenue in the Asian market. EBITDA also decreased from €345.3 million to €341 million compared to the same quarter of the previous fiscal year.
Contrastingly, European revenue saw a 3.5% increase compared to the previous quarter, and Latin American revenue surged by 26.3% year-on-year. Carlesund expressed optimism about the company's trajectory, stating, "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.
