Evolution has formally terminated its merger agreement with Galaxy Gaming, a company specializing in table games and casino technology. The announcement was made on Tuesday, following comments from CEO Martin Carlesund last week, indicating that the merger was not essential to Evolution's operations.
As part of the termination, Evolution will pay Galaxy Gaming a fee of $5.2 million. Despite the end of the merger discussions, Evolution affirmed that it would maintain its existing business relationship with Galaxy Gaming. In 2023, both companies had extended their licensing agreement for an additional 10 years.
In a press release accompanying Evolution’s Q2 results, Carlesund suggested that the termination was anticipated, as the closing period for the merger had lapsed the previous Friday. “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,” Carlesund explained, adding that while Galaxy is a reputable company, the acquisition was not significant given its size. He emphasized that the decision would not materially affect Evolution's operations or its long-term objectives in the US market.
The merger was first announced in July 2024, when Evolution planned to buy out all outstanding shares of Galaxy Gaming for approximately $85 million. However, Galaxy Gaming announced this week that it had not yet secured the last two necessary gambling regulatory approvals. In their statement, Galaxy mentioned that they were assessing their options, either to request an extension for the merger's closing deadline or to terminate the deal altogether. Despite Galaxy's efforts to find a solution other than termination, Evolution opted to withdraw from the agreement.
In its recent Q2 report, Evolution reported a 1.2% drop in net revenue compared to the same time last year, totaling €517.8 million ($591.4 million). This decline was primarily attributed to a 3.7% revenue decrease in Asia. EBITDA also saw a reduction, falling to €341 million from €345.3 million in the same quarter of its fiscal year 2025.
On a more positive note, revenue from Europe increased by 3.5% compared to the previous quarter, while revenue from Latin America experienced a significant year-on-year growth of 26.3%. Carlesund expressed optimism about the company's prospects, 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.
