LAS VEGAS, July 18, 2024 (GLOBE NEWSWIRE) — Evolution Malta Holding Limited (“Evolution”), a wholly owned subsidiary of Evolution AB (publ), has entered into an agreement to acquire Galaxy Gaming, Inc. (“Galaxy Gaming”) (OTC: GLXZ) for aggregate consideration of approximately $85 million to be paid in cash (the “Transaction”).
Transaction Highlights and Strategic Rationale
As a leading developer and distributor of innovative casino table games and enhanced gaming technology solutions, Galaxy Gaming continues to revolutionize the casino industry with its cutting-edge products and exceptional service. With a diverse portfolio of cutting-edge games, Galaxy Gaming has established itself as a trusted partner to casinos around the world.
The acquisition is in line with Evolution’s strategy to become the world’s leading casino game provider and offer the best gaming content to its customers. With the acquisition of Galaxy Gaming, Evolution solidifies its presence in the US market and strengthens its position as a leading licensor of proprietary table games to the online gaming industry.
“We are pleased to announce the acquisition of Galaxy Gaming, which marks an important milestone in our mission to provide our customers with unparalleled gaming experiences. Galaxy Gaming’s leading products and technology complement our existing portfolio and strengthen our strategic position.” – Martin Karlsund, CEO, Evolution AB (Publishing)
“Evolution intends to retain its management team and employees and will operate Galaxy Gaming as an independent business unit,” Karlsund added.
“We see this transaction as an opportunity to bring together two world-class, customer-focused teams to benefit all stakeholders. It combines Galaxy Gaming’s vibrant land-based business, driven by industry-leading games and advanced technology, with Evolution’s global reach and innovative online gaming leadership. Over the years, our collaboration has been successful in bringing popular games such as 21+3® and Lucky Ladies® to millions of players in regulated iGaming markets around the world. This acquisition by Evolution allows Galaxy to continue to focus on growth and expansion while maintaining its independence, and to leverage Evolution’s operational and financial strength to drive product sharing and drive cutting-edge omni-channel innovation.” – Matt Ryback, President and CEO, Galaxy Gaming
Galaxy Gaming forecasts net revenue of $29 million to $30 million and adjusted EBITDA of $12 million to $13 million for fiscal 2024.
Review and Funding
Under the merger agreement, Evolution has agreed to acquire all of Galaxy Gaming’s outstanding common stock for $3.20 per share in cash, a 124% premium to Galaxy Gaming’s closing stock price on July 17, 2024, the last trading day prior to the announcement of the transaction. The transaction values Galaxy Gaming at approximately $85 million in total equity and approximately $124 million including net debt. The consideration will be funded with cash on hand.
Acquisition terms and schedule
The transaction has been approved by Galaxy Gaming’s board of directors. Galaxy Gaming’s directors, who hold approximately 14% of Galaxy Gaming’s common shares, have entered into support agreements to vote in favor of the transaction.
The transaction is subject to customary closing conditions, including approval of Galaxy Gaming’s shareholders and certain approvals from gaming regulatory authorities. The parties currently expect the transaction to close in mid-2025, subject to satisfaction of these closing conditions.
Advisor
Evolution has engaged JP Morgan SE as its exclusive financial advisor and Kirkland & Ellis LLP as its legal advisor in connection with the transaction. Galaxy Gaming has engaged Macquarie Capital as its exclusive financial advisor and Latham & Watkins LLP as its legal advisor in connection with the transaction.
For further information, please contact:
For evolution
Jacob Kaplan, CFO, ir@evolution.com
For Galaxy Gaming
Investor Inquiries: Steve Kopjo, CFO, investors@galaxygaming.com
This press release contains inside information that Evolution AB (publ) is required to make public pursuant to the EU Market Abuse Regulation. This information was submitted for publication on 18 July 2024 at 22:30 CEST.
About Evolution
Evolution AB (publ) (“Evolution”) develops, manufactures, sells and licenses fully integrated B2B live casino solutions for gaming operators. Since its founding in 2006, Evolution has grown to become a leading B2B provider with over 800 operators as customers. Today, the group employs more than 20,500 people across studios across Europe and North America. The parent company is based in Sweden and is listed on Nasdaq Stockholm under the ticker EVO. For more information, please visit www.evolution.com.
Evolution is licensed and regulated by the Malta Gaming Authority under licence MGA/B2B/187/2010. Evolution is also licensed and regulated in a number of other jurisdictions, including the UK, Belgium, Canada, Romania and South Africa.
About Galaxy Gaming
Headquartered in Las Vegas, Nevada, Galaxy Gaming (galaxygaming.com) develops and delivers innovative games, bonus systems and technology solutions to brick-and-mortar and online casinos worldwide. Galaxy Gaming offers time-tested games developed by gaming experts and backed by the highest levels of customer support. Galaxy Gaming Digital is a leading global licensor of unique table games for the online gaming industry. Galaxy Gaming holds 131 licenses worldwide, including in 28 US states.
Safe Harbor
This press release contains forward-looking statements that are based on current expectations and projections, and may also be included in oral statements made from time to time by representatives of Galaxy Gaming or Evolution. These statements are intended to qualify for the safe harbors of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements identified by words such as “believes,” “will,” “may,” “could,” “expects,” “anticipates,” “intends,” “plans,” “seeks,” “estimates,” “believes,” “continues,” “projects” and similar references to future periods, or the incorporation of projections or forecasts. All forward-looking statements are based on current expectations and projections regarding future events. These forward-looking statements reflect the current views, models, and assumptions of Galaxy Gaming and/or Evolution (as applicable) and are subject to various risks and uncertainties that cannot be predicted or limited and may cause actual results to differ materially from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, (i) Galaxy Gaming’s ability to enter into and maintain strategic alliances, product placements or installations in land-based casinos or expand its iGaming business, gain new market share, obtain licenses in new jurisdictions or maintain existing licenses, develop or acquire and sell its own products, comply with regulations, gaming-related and non-gaming-related statutes and regulations and/or self-imposed restrictions imposed on or by its customers that affect revenues in the land-based and online casino markets, its ability to get games approved in the relevant jurisdictions and its ability to adapt to changes resulting from COVID-19 or other pandemics (such as government shutdowns, travel restrictions and supply chain disruptions), and other factors; (ii) risks associated with the satisfaction or waiver of the conditions to the completion of the proposed acquisition, including, but not limited to, the inability to obtain required regulatory approvals, Galaxy Gaming’s ability to obtain necessary regulatory approvals, and Galaxy Gaming’s ability to obtain necessary regulatory approvals and maintain its existing licenses; These forward-looking statements include, but are not limited to, risks related to the proposed acquisition, including the possibility that the proposed acquisition may not be completed within the expected time period or at all, the possibility that competing proposals may be made, risks related to the ability to realize the expected benefits of the proposed acquisition, including the possibility that the proposed acquisition may not be completed within the expected time period or at all, the risk that the businesses will not be successfully integrated, disruptions from the transaction making it difficult to maintain business and operational relationships, the negative impact of this announcement, significant transaction costs, unknown liabilities and the risk of litigation and/or regulatory action relating to the proposed acquisition or Galaxy Gaming’s business. All forward-looking statements made herein are expressly qualified in their entirety by these cautionary statements, and no assurance can be given that the actual results, events or developments referred to herein will occur or be realized. Readers are cautioned that all forward-looking statements speak only of facts and circumstances as of the date of this press release. Galaxy Gaming and Evolution each expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures
Adjusted EBITDA includes adjustments to net loss/income to exclude interest, taxes, depreciation and amortization, stock-based compensation, gain or loss on debt extinguishment, foreign exchange gain or loss, change in estimated fair value of interest rate swap liability, severance, litigation related and other expenses. Adjusted EBITDA is not a performance measure defined in accordance with accounting principles generally accepted in the United States (“US GAAP”). Estimates of projected Adjusted EBITDA depend on future expense levels that cannot be reasonably estimated at this time. Accordingly, we are unable to provide a reconciliation of projected Adjusted EBITDA to the most comparable GAAP measure without undue effort.
Additional information and where to find it
This news release may be deemed solicitation material in connection with the proposed acquisition of Galaxy Gaming. A special meeting of Galaxy Gaming’s stockholders will be announced shortly to obtain the approval of the stockholders of Galaxy Gaming in connection with the proposed acquisition. Galaxy Gaming’s stockholders intend to file a proxy statement and other relevant documents with the SEC in connection with the proposed acquisition. Galaxy Gaming’s stockholders are urged to read the definitive proxy statement and other relevant materials carefully and in their entirety when they become available because they will contain important information about Galaxy Gaming and the proposed acquisition. Investors will be able to obtain these materials (when available) and other documents filed by Galaxy Gaming with the SEC free of charge at the SEC’s website at www.sec.gov and on Galaxy Gaming’s website at www.galaxygaming.com.
No Offers or Solicitations
This news release is for informational purposes only and is not intended to, and does not form part of, any offer, invitation or solicitation of an offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities pursuant to the proposed transaction or otherwise, or the solicitation of any vote or approval in any jurisdiction, nor will there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law.
Participants Recruited
Galaxy Gaming and its directors, executive officers, certain employees and other persons may be deemed to be participants in the solicitation of proxies from its stockholders in connection with the proposed acquisition. Information about Galaxy Gaming’s directors and executive officers is set forth in Galaxy Gaming’s proxy statement on Schedule 14A for its 2024 annual meeting of stockholders, which was filed with the SEC on April 26, 2024, and Galaxy Gaming’s current report on Form 8-K, which was filed with the SEC on May 5, 2024. Under SEC rules, additional information regarding the persons who may be deemed to be participants in the solicitation of Galaxy Gaming’s stockholders in connection with the proposed acquisition, and any direct or indirect interests that such persons may have in the proposed acquisition, will be set forth in Galaxy Gaming’s definitive proxy statement for its special meeting of stockholders to be filed with the SEC.
