Situation
Cato, Inc. (“Cato” or the “Company”), headquartered in Salisbury, Maryland, is a leading petroleum marketer, convenience retailer, branded QSR operator, and diversified fuels distributor with operations 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, branded QSRs, wholesale fuels distribution, and propane.

Prior to the sale, the Company supplied retail propane, commercial refined fuels, and heating oil to a customer base of over 5,000 residential and commercial accounts.

Matrix was retained to perform a valuation of the retail propane and commercial refined fuels business (the “Business”)

Ultimately, the shareholders decided to exit the Business in order to focus on expanding the Company’s other business units, including: convenience retail operations, branded quick service restaurant operations, and wholesale dealer business.

Objective
To customize, execute, and complete a confidential sale process in a way that would allow the shareholders to realize maximum after-tax value upon the sale of the Business.

Solution
Matrix provided Cato with merger and acquisition advisory services, which included valuation advisory, marketing the business through a confidential, structured sale process, and negotiation of the transaction.

The sale process included a buyer pool of regional and national propane marketers & commercial refined fuels distributors. Matrix executed a customized sale process to solicit offers for the entire Business and for discrete operating divisions to determine the best path forward.

Multiple competitive offers were received for the Business, and Star Group, L.P. (NYSE: SGU) and its affiliates were ultimately selected as the acquirer.

Matrix assisted in the negotiation of the purchase agreement and coordinated the due diligence and closing process. The transaction with Star Group, L.P. closed in March 2025.