Star Group LP Acquires Cato Inc.’s Home Heat & Commercial Fuels Division

Matrix Capital Markets Group, Inc. closes the sale of the home heat and commercial fuels division of Cato, Inc. (“Cato” or the “Company”) 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 Maryland, Delaware, Pennsylvania and Virginia. 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, Maryland, 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.