Evolution Abandons Merger Agreement with Galaxy Gaming

The company Evolution has decided to terminate the merger agreement with table games and casino technology provider Galaxy Gaming. This was announced on Tuesday following comments from Evolution's CEO Martin Carlsund, who emphasized last week that this agreement was not critical to the business. Evolution is obligated to pay Galaxy Gaming $5.2 million as compensation for the termination.

Maintaining Collaboration

Despite abandoning the merger, Evolution stated that it will continue its collaboration with Galaxy Gaming under the existing partnership. In 2023, the companies signed a 10-year license extension agreement.

Impact on Evolution

Carlsund hinted in the Q2 press release that such an announcement was expected following the deal's termination on Friday. He noted, "Over the two years, Evolution has spent considerable time, effort, and resources to finalize this deal, but the scale of the deal is insignificant for Evolution."

The intention to acquire all shares of Galaxy Gaming was announced in July 2024. The deal was valued at $85 million. However, as of now, the remaining two licenses from regulators have not been obtained.

Financial Performance of Evolution in Q2

In the second quarter, Evolution's revenue decreased by 1.2% year-on-year to €517.8 million ($591.4 million), primarily due to a decline of 3.7% in Asia. EBITDA also decreased to €341 million compared to €345.3 million a year ago. European revenues slightly grew by 3.5%, while in Latin America, the company noticed a growth of 26.3%.

Martin Carlsund expressed optimism, stating: "Revenue and margins are heading in the right direction, cost control remains high, cash flow is improving, and we continue to expand into key markets."