Evolution has given notice to terminate its proposed takeover of Galaxy Gaming after the merger agreement’s 17 July outside date passed without two required regulatory approvals, bringing an end to a two-year effort to combine the online casino supplier with the Las Vegas table-games business.
The Swedish-listed group said on Tuesday that its Maltese subsidiary, Evolution Malta Holding Limited, had terminated the merger agreement with Galaxy Gaming. The agreement also involved Galaga Merger Sub, an Evolution-owned company created to carry out the acquisition. Evolution will pay Galaxy a termination fee of $5,234,678.
The decision came one day after Galaxy said it was weighing whether to seek another extension or walk away. Two gaming regulatory approvals remained outstanding when the agreement’s “outside date” passed on 17 July, and Evolution had not waived those conditions.
Evolution said the collapse of the transaction would not end the companies’ wider ties. “Evolution expects to continue working with Galaxy Gaming within the framework of the companies’ existing strong commercial relationship,” it said.
Deal stalls at the final hurdle
Evolution agreed in 2024 to buy Galaxy for an equity value of about $85m in cash. Galaxy develops and distributes casino table games and related technology to physical and online operators, with more than 130 licences worldwide.
As recently as Monday, Galaxy had left open the possibility of keeping the deal alive. It said neither party had terminated the agreement and that it was considering “seeking a further extension of the Outside Date to facilitate the closing of the Merger, or terminating the Merger Agreement”.
Matt Reback, Galaxy’s president and chief executive, said: “For two years, we have been working with Evolution towards a closing of the Merger Agreement.”
He added: “We are excited about the trajectory of the company, and we look forward to a continued relationship with Evolution.”
Evolution’s comments had already cast some doubt over whether the deal would go ahead. In second-quarter results published on 17 July, its chief executive, Martin Carlesund, said the agreed closing period was expiring and either side would then be able to terminate.
“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 said at the time.
“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.”
Strong balance sheet limits financial impact
The termination fee is small in relation to Evolution’s finances. The company reported second-quarter net revenue of €517.8m, down 1.2 per cent from a year earlier, while earnings before interest, tax, depreciation and amortisation fell by the same percentage to €341m. Quarterly profit rose 1.3 per cent to €251.4m.
Evolution ended June with €1.15bn in cash and cash equivalents, more than double the €505.3m reported a year earlier. Its interim accounts still listed the Galaxy deal as pending and said the target had not been included in the consolidated figures.
For Galaxy, the immediate question is how it proceeds as an independent company after two years spent preparing for a sale. Its statement stressed growth in its range of table games, expansion into new markets and a higher share of recurring revenue.
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