Evolution has officially terminated its merger agreement with Galaxy Gaming, a provider specializing in table games and casino technology. This decision was announced on Tuesday following comments made last week by CEO Martin Carlesund, who indicated that the merger was not critical to Evolution’s business strategy.
As part of the termination, Evolution will pay Galaxy Gaming a fee of $5.2 million. However, the two companies will maintain their existing partnership and continue collaborating under their current business arrangement. In 2023, they extended their licensing agreement for another decade.
In a press release detailing Evolution's second-quarter results, Carlesund hinted at the possibility of this decision after the deadline for closing the merger 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 was originally announced in July 2024, when Evolution intended to acquire all outstanding shares of Galaxy Gaming in a deal valued at approximately $85 million. However, just prior to this announcement, Galaxy Gaming revealed that it had not yet obtained two necessary gambling regulatory approvals. In light of this, Galaxy announced it was considering its options, which included either seeking an extension for the merger closing or terminating the deal altogether. Despite Galaxy’s openness to alternatives, Evolution ultimately chose to withdraw from the agreement.
In related financial news, Evolution reported a decline in both net revenue and EBITDA for the second quarter. The company's net revenue decreased by 1.2% compared to the previous year, totaling €517.8 million ($591.4 million), with a 3.7% drop in revenue attributed to Asian markets. Similarly, EBITDA fell from €345.3 million in the same quarter the previous year to €341 million.
Despite these reductions, there was a positive development in European markets, which saw a 3.5% revenue increase from the previous quarter, while revenue from Latin America surged by 26.3% year-on-year. Carlesund remained optimistic about the company's direction, noting, "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 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."
