Actera Group: Investing in Mars Cinema Group (A)

By: Eren Kuzucu and Victoria Ivashina

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Synopsis: In summer of 2010, Murat avu o lu (HBS MBA 1994) led private equity firm Actera Group's investment in Mars Cinema Group (Mars), the leading movie exhibitor in Turkey. Immediately after acquiring Mars and merging it with the second larger player in the market, AFM, avu o lu focused on institutionalizing and implementing value creation work streams in Mars. While transforming an entrepreneurial company into an institutionalized firm, avu o lu established adjacent businesses such as movie advertising and ticket sales. The most recent step in transforming Mars was to establish a movie distribution arm, which would help the company to monitor and manage the seasonal cycles, enhance the appeal for investors in the exit, and improve the valuation. However, while avu o lu was laying out the plans for his next move with movie distribution in 2014, Turkey's Council of State, the highest administrative court in the country, had decided to cancel the approval for the merger of Mars and AFM, putting all of Actera's efforts on Mars at risk. Should avu o lu push the stop button for distribution? If avu o lu decided to move forward with distribution, should he do it now or wait until the process with Turkey's judiciary and regulatory authorities cleared out?