Evolution terminates merger agreement with Galaxy Gaming

Evolution has given notice of termination for the merger agreement with the specialist table games and casino technology provider Galaxy Gaming.

Evolution made the announcement on Tuesday, following comments from its CEO Martin Carlesund last week that emphasised the agreement wasn’t vital to the business.

The supplier giant will be required to pay Galaxy Gaming $5.2 million as a termination fee.

Despite the termination, Evolution stated it will continue to work with Galaxy Gaming within the framework of its existing business relationship.

In 2023, the two companies penned a 10-year extension to their licensing agreement.

Galaxy deal ‘not significant’ for Evolution

In the press release for Evolution’s Q2 results, Carlesund hinted that such an announcement was coming after the closing period for the deal 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 outlined.

“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 deal was first announced in July 2024, with Evolution agreeing to acquire all outstanding shares of Galaxy Gaming in a deal valued at around $85 million.

On Monday, however, Galaxy Gaming announced two remaining gambling regulatory approvals had not yet been obtained.

Galaxy said it was “evaluating its options”, stating it would either seek a further extension to the deadline to facilitate the closing of the merger, or terminate the merger itself.

Despite Galaxy suggesting an alternative to a termination could be found, Evolution has made the decision to move on from the deal.

Q2 revenue and EBITDA drops for Evolution

In Q2, Evolution’s net revenue dropped 1.2% year-on-year to €517.8 million ($591.4 million), led by a 3.7% decline in revenue in Asia.

EBITDA also fell to €341 million from the €345.3 million generated in the same quarter of Evolution’s FY25.

The revenue and EBITDA declines were in spite of Europe returning to growth after several consecutive quarters of decreasing revenue from the region.

European revenue edged up 3.5% from the quarter prior, while LatAm revenue also rocketed 26.3% year-on-year.

Carlesund voiced his optimism, 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.”