Cato Inc. Sells Home Heat & Commercial Fuels Division
SALISBURY, Md. — Cato Inc. closed on the sale of its home heat and commercial fuels division to concentrate on its retail and wholesale business to an affiliate of Star Group LP
Cato is a supplier of retail propane, heating oil and commercial refined fuels to a customer base of more than 5,000 residential and commercial accounts throughout Maryland, Delaware and Virginia.
"We are thrilled to welcome Cato's home heat and commercial fuels' customers and employees to the Star Group family," said Anthony Silecchia, Jr., vice president of Star Group. "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.
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"The Cato division will continue to operate from its facilities in Salisbury, ensuring a smooth transition and ongoing commitment to excellence," he added.
Cato 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 Cato's son-in-law, Michael Abercrombie, and subsequently Michael (Mike) Abercrombie, Jr., the company has grown to become one of the Delmarva Peninsula's largest petroleum marketers, operating 19 convenience stores and 26 Arby's, Popeye's and Subway quick-service restaurants 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 more than 5,000 residential and commercial accounts, the company stated.
Matrix Capital Markets Group 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.
"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," said Mike Abercrombie, Jr., the company's president and CEO.
The transaction was managed by Sean Dooley, managing director; Spencer Cavalier, co-head of Matrix's Downstream Energy & Convenience Retail Investment Banking Group; Nate Wah, senior associate; and Reilly Erhardt, CPA, senior analyst.
"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," the Matrix team said.
J. Garrett Sheller LLC served as legal counsel to Cato Inc.
Star Group LP is a full-service provider specializing in the sale of home heating products and services to residential and commercial customers.