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Evolution has terminated its planned acquisition of Galaxy Gaming after two outstanding gambling regulatory approvals prevented the transaction from closing within the agreed period.
The company issued notice on Tuesday to end the merger agreement with Galaxy Gaming, a table games and casino technology provider. Evolution will pay Galaxy Gaming a $5.2 million termination fee.
Galaxy Gaming said on Monday that the two remaining regulatory approvals had not been obtained. It was considering either requesting another extension to the closing deadline or terminating the merger. Evolution subsequently decided to withdraw from the transaction.
The acquisition was announced in July 2024, when Evolution agreed to purchase all outstanding shares of Galaxy Gaming in a transaction valued at approximately $85 million. The closing period for the deal expired on Friday.
Although the takeover will not proceed, Evolution said it intends to continue working with Galaxy Gaming under their existing business relationship. The companies signed a 10-year extension to their licensing agreement in 2023.
The termination follows Evolution’s second-quarter results, which showed net revenue falling 1.2% year-on-year to €517.8 million ($591.4 million). The decline was led by Asia, where revenue decreased 3.7%.
Evolution reported EBITDA of €341 million ($389 million), compared with €345.3 million ($393.93 million) in the same quarter of its FY25. The decreases in revenue and EBITDA came despite Europe returning to growth after several consecutive quarters of declining regional revenue. European revenue increased 3.5% from the previous quarter, while Latin American revenue rose 26.3% year-on-year.
In the second-quarter results release, Evolution CEO Martin Carlesund said the company had spent substantial time, resources, and effort addressing the administrative requirements associated with the acquisition over the past two years. He also indicated that the transaction was not material to Evolution because of Galaxy Gaming’s size.
Evolution CEO Martin Carlesund
“Galaxy is a great company; however, due to its size, the transaction is not significant for Evolution,” Carlesund said. “The outcome has no material impact on our existing business, our US operations, or our long-term ambitions.”
Carlesund said Evolution’s revenue and margin had improved compared with the first quarter, while cost controls remained in place and cash flow was strengthening. He added that the company was continuing its expansion in key markets and progressing with its product plans, despite the challenges encountered during the quarter.