Star Group acquires Cato’s home heat and commercial fuel division

Star Group, a full-service provider specializing in the sale of home heating products and services to residential and commercial customers, acquired the home heat and commercial fuels division of Cato.

Matrix Capital Markets Group advised on the sale. Matrix is an independent, advisory-focused, privately held investment bank headquartered in Richmond, Virginia.

Based in Salisbury, Maryland, Cato is a 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 quick-service restaurants (QSRs).

“We are thrilled to welcome Cato’s home heat and commercial fuels’ customers and employees to the Star Group family,” says 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. The Cato division will continue to operate from its facilities in Salisbury, Maryland, ensuring a smooth transition and ongoing commitment to excellence.”

According to the company, 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.

Matrix provided merger and acquisition advisory services to Cato, including 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 and convenience retail investment banking group; Nate Wah, CPA, senior associate; and Reilly Erhardt, CPA, senior analyst.

“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,” says Mike Abercrombie Jr., Cato’s president and CEO. “The Matrix team was fantastic to work with from the beginning to the end of the transaction.”

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