Evolution has officially terminated its merger agreement with Galaxy Gaming, a specialty table games and casino technology provider. The company announced this decision on Tuesday, following remarks from CEO Martin Carlesund the previous week, where he indicated that the merger was not essential to Evolution's operations.
As part of this termination, Evolution will owe Galaxy Gaming a fee of $5.2 million. Despite the cancellation of the merger, Evolution confirmed that it will maintain its ongoing business relationship with Galaxy Gaming.
In 2023, the two companies extended their licensing agreement for an additional 10 years. Carlesund hinted at the announcement's timing during a Q2 results press release, noting that the closing period for the deal had expired on 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.
He further added, "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 was first revealed in July 2024, when Evolution planned to acquire all outstanding shares of Galaxy Gaming in a deal worth approximately $85 million. However, on Monday, Galaxy Gaming disclosed that it had yet to secure two remaining gambling regulatory approvals. The company stated it was weighing its options, considering either a request for a further deadline extension or the termination of the merger.
Despite Galaxy's indications that alternatives might still be possible, Evolution decided to proceed with ending the agreement.
In its recent Q2 report, Evolution reported a 1.2% decline in net revenue year-on-year, totaling €517.8 million ($591.4 million), with a notable 3.7% drop in revenue attributed to operations in Asia. EBITDA for the quarter dropped to €341 million from €345.3 million in the same quarter of Evolution’s fiscal year 2025.
Despite these declines, Europe saw growth again after several quarters of revenue losses, with European revenue increasing by 3.5% sequentially, and Latin American revenue soaring 26.3% year-on-year.
Carlesund expressed a positive outlook, 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."
