Evolution has officially terminated its merger agreement with Galaxy Gaming, a provider known for its specialized table games and casino technology. This announcement came on Tuesday, following comments from CEO Martin Carlesund, who asserted last week that the acquisition was not crucial for Evolution's operations.
As part of the termination, Evolution will pay Galaxy Gaming a fee of $5.2 million. Despite ending the merger talks, Evolution intends to maintain its existing collaboration with Galaxy Gaming.
The two companies had extended their licensing agreement by ten years earlier in 2023, reinforcing their ongoing business relationship. In the press release detailing Evolution’s financial results for the second quarter, Carlesund alluded to the upcoming termination, revealing that the merger agreement's closing period had ended 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 first announced in July 2024, when Evolution aimed to acquire all outstanding shares of Galaxy Gaming in a deal valued at approximately $85 million. However, on Monday, Galaxy Gaming revealed that two key gambling regulatory approvals were still pending. The company expressed that it was considering its options, either seeking an extension for the merger's closing or opting to terminate the agreement altogether.
While Galaxy hinted at a possible resolution, Evolution has decided to move on. In its Q2 report, Evolution reported a 1.2% decline in net revenue year-on-year, totaling €517.8 million ($591.4 million), significantly affected by a 3.7% dip in revenue from Asia. EBITDA also fell to €341 million from €345.3 million recorded in the same quarter of FY25.
Despite these declines, Evolution saw growth in European markets, with a 3.5% increase from the previous quarter, and strong performance in Latin America, boasting a 26.3% year-on-year increase. 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."
