Matrix Advises on the Sale of Cato, Inc.’s Home Heat and Commercial Fuels Division to Star Group, L.P.
Matrix Capital Markets Group, Inc. announces the successful closing on the sale of the home heat and commercial fuels division of Cato, Inc. to an affiliate of Star Group, L.P. Based in Salisbury, Maryland, Cato is a leading supplier of retail propane, heating oil, and commercial refined fuels to a customer base of over 5,000 residential and commercial accounts throughout Maryland, Delaware, and Virginia.
The Company was founded in 1960 by Elliot “Buck” Cato and provided refined fuels distribution service to local families, businesses, and farms. Throughout several decades of growth led by Elliot’s son-in-law, Michael Abercrombie, and subsequently Michael (Mike) Abercrombie, Jr., the Company expanded into retail convenience stores, wholesale fuels distribution, propane, and QSRs. Cato has since grown to become one of the Delmarva Peninsula’s largest petroleum marketers, operating 19 convenience stores, and 26 Arby’s, Popeye’s, and Subway QSRs while supplying motor fuels to wholesale accounts in MD, DE, PA, and VA. The Company’s home heat division experienced significant growth in recent years, expanding to a customer base of over 5,000 residential and commercial accounts. For nearly 65 years, the Cato family and its over 700 dedicated employees and loyal associates have provided best-in-class service to local communities throughout the Delmarva Peninsula.
Matrix provided merger and acquisition advisory services to Cato, which included valuation advisory, marketing the business through a confidential, structured sale process, and negotiation of the transaction. The transaction was managed by Sean Dooley, CFA, ASA, Managing Director; Spencer Cavalier, CFA, ASA, Co-Head of Matrix’s Downstream Energy & Convenience Retail Investment Banking Group; Nate Wah, CPA, Senior Associate; and Reilly Erhardt, CPA, Senior Analyst.
Mike Abercrombie, Jr., the Company’s President & CEO commented, “While divesting of the home heat side of our business was a difficult decision, the change will allow Cato to concentrate and continue to grow our retail and wholesale company. The Matrix team was fantastic to work with from the beginning to the end of the transaction.”
Anthony Silecchia Jr., Vice President of Star Group, L.P, stated, “We are thrilled to welcome Cato’s home heat and commercial fuels’ customers and employees to the Star Group family. This addition presents an excellent opportunity for us to increase our presence and strengthen our position as a leader in providing the best energy, heating, and home services to residential and commercial customers throughout Delaware, Maryland, and Virginia. The Cato division will continue to operate from its facilities in Salisbury, MD, ensuring a smooth transition and ongoing commitment to excellence.”
Messrs. Cavalier and Dooley added, “Matrix is honored to have had the opportunity to advise Mike and the Cato enterprise on the successful divestment of its home heat and commercial fuels division to SGU. We wish Mike and Cato all the best with their future plans, including the continued growth of their very successful convenience retailing and restaurant business units.”
J. Garrett Sheller, of J. Garrett Sheller, LLC served as legal counsel to the Company.
About Star Group, L.P.
Star Group, L.P. is a full-service provider specializing in the sale of home heating products and services to residential and commercial customers to heat their homes and buildings. The Company also sells and services heating and air conditioning equipment to its home heating oil and propane customers and, to a lesser extent, provides these offerings to customers outside of its home heating oil and propane customer base.
About Matrix’s Downstream Energy & Convenience Retail Investment Banking Group
Matrix’s Downstream Energy & Convenience Retail Investment Banking Group is recognized as the national leader in providing transactional advisory services to companies in the downstream energy and multi-site retail sectors including convenience retailing, petroleum marketing & distribution, propane distribution, heating oil distribution, lubricants distribution, petroleum logistics, terminals, car washes and quick service restaurants. Group members are dedicated to these sectors and draw upon complementary experiences to provide advisory services to complete sophisticated merger and acquisition transactions, debt and equity capital raises, corporate valuations, special situations and strategic planning engagements. Since 1997, the firm’s Downstream Energy & Convenience Retail Investment Banking Group has successfully completed over 300 engagements.
About Matrix Capital Markets Group, Inc.
Founded in 1988, Matrix Capital Markets Group, Inc. is an independent, advisory focused, privately-held investment bank headquartered in Richmond, VA, with an additional office in Baltimore, MD. Matrix provides merger & acquisition and financial advisory services for privately-held, private-equity owned, not-for-profit and publicly traded companies. Matrix’s advisory services include company sales, recapitalizations, capital raises of debt & equity, corporate carve outs, special situations, management buyouts, corporate valuations and fairness opinions.
The firm’s industry-focused, dedicated sector advisory groups serve clients in the automotive aftermarket, downstream energy & convenience retail, healthcare, and outdoor recreation & marine markets. Its broad sector advisory groups serve clients in a wide range of industries including business services, consumer, diversified industrials, restaurants and transportation & logistics. For additional information, visit http://www.matrixcmg.com.