Evolution has officially withdrawn from its previously announced plans to acquire Galaxy Gaming, citing ongoing regulatory hurdles that delayed the transaction beyond an acceptable timeframe.
The company announced on Tuesday that it had issued a notice of termination for the merger agreement with Galaxy Gaming, a provider specializing in table games and casino technology. This follows comments from Evolution’s CEO, Martin Carlesund, made last week, indicating that the acquisition was not critical to the company’s strategic goals.
As part of the termination, Evolution will pay Galaxy Gaming a fee of $5.2 million. Despite ending the merger process, Evolution reaffirmed its commitment to maintaining its existing relationship with Galaxy Gaming. The companies had recently extended their licensing agreement for another 10 years in 2023.
In the company’s Q2 earnings release, Carlesund indicated that the termination was imminent, noting that the deal’s closing period 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,” he stated. “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, with Evolution planning to acquire all outstanding shares of Galaxy Gaming in a deal valued at approximately $85 million. However, on Monday, Galaxy Gaming announced that it had not yet secured two remaining gambling regulatory approvals, prompting the company to consider its options. Galaxy indicated it might seek an extension to the deadline or choose to terminate the deal altogether.
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Although Galaxy suggested that an alternative to termination could still be possible, Evolution has decided to move forward without proceeding with the acquisition.
In its latest quarterly report, Evolution revealed a 1.2% decrease in net revenue year-on-year, totaling €517.8 million (approximately $591.4 million). The decline was primarily driven by a 3.7% drop in revenue in the Asia-Pacific region.
EBITDA also declined slightly, from €345.3 million in the same quarter last year to €341 million. These figures came despite signs of regional recovery, as Europe experienced a return to growth after several consecutive quarters of decline. European revenue increased by 3.5% compared to the previous quarter, while Latin America saw a significant year-on-year surge of 26.3%.
Carlesund expressed a cautious 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.” He added, “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.”
