Evolution, a prominent player in the online gaming industry, has announced its decision to acquire Galaxy Gaming for an estimated equity value of $85 million, payable in cash. This acquisition is poised to enhance Evolution’s offerings in the casino gaming sector and bolster its footprint in the competitive US market.
Overview of the Acquisition
In a strategic maneuver to expand its portfolio, Evolution has entered into an agreement to acquire Galaxy Gaming, a renowned name in casino table games and gaming technology solutions. The acquisition is valued at $85 million in cash, translating to a substantial premium of 124% over Galaxy Gaming’s closing share price on July 17, 2024. The total equity value of the deal, including net debt, amounts to approximately $124 million.
Strategic Rationale and Market Impact
The acquisition aligns with Evolution’s broader strategy of diversifying its gaming content and enhancing its market presence, particularly in the US. By integrating Galaxy Gaming’s portfolio of innovative table games and technology solutions, Evolution aims to deliver a more comprehensive gaming experience to its customers and solidify its competitive edge in the burgeoning iGaming sector.
Statements from Key Executives
Martin Carlesund, CEO of Evolution, emphasized the strategic importance of this acquisition. He remarked, “Galaxy Gaming’s exceptional products and technology complement our existing portfolio and strengthen our strategic position. Evolution intends to retain the management and employees and also plans to operate Galaxy Gaming as a separate and independent business unit.”
Echoing this sentiment, Matt Reback, President and CEO of Galaxy Gaming, highlighted the benefits of the deal for his company. He stated, “For years, our collaboration has successfully delivered popular games like 21+3 and LuckyLadies to millions of players in regulated iGaming markets globally. This acquisition by Evolution empowers Galaxy to sustain and maintain its independence while continuing to focus on growth and expanding its operations, leveraging Evolution’s operational and financial strength to facilitate product sharing and drive omni-channel innovation.”
Transaction Details
Under the terms of the agreement, Evolution will purchase all outstanding shares of Galaxy Gaming’s common stock at $3.20 per share in cash. This premium reflects a notable increase from Galaxy Gaming’s recent share price. The transaction will be financed using Evolution’s cash reserves.
The deal has been approved by Galaxy Gaming’s board of directors, with board members holding approximately 14% of the company’s common stock agreeing to vote in favor of the transaction. Completion of the acquisition is contingent upon customary closing conditions, including stockholder and regulatory approvals. The parties anticipate that the transaction will conclude by mid-2025.
Advisors for the Transaction
For this acquisition, Evolution has engaged JP Morgan SE as its exclusive financial advisor and Kirkland & Ellis as its legal advisor. Galaxy Gaming, on the other hand, has enlisted Macquarie Capital as its exclusive financial advisor and Latham & Watkins as its legal advisor.
Recent Developments for Evolution
In addition to this acquisition, Evolution recently expanded its market reach by launching online live casino games in Delaware. This launch, which took place in July 2024, is a result of Evolution’s partnership with Rush Street Interactive’s BetRivers platform. The new offerings include a variety of games such as roulette, blackjack, baccarat, and various poker variants, further cementing Evolution’s presence in the online gaming landscape.
Evolution’s acquisition of Galaxy Gaming represents a strategic consolidation aimed at enhancing its gaming content portfolio and strengthening its position in the US market. The deal underscores Evolution’s commitment to expanding its footprint in the global iGaming sector and leveraging Galaxy Gaming’s innovative technology and market reach to drive future growth. As the transaction progresses towards its expected completion in mid-2025, stakeholders will be keenly watching the integration process and its impact on both companies’ market positions.