Steve Carroll·December 4, 2025

ETA Unicorn: $1 Billion in Revenue in 5 Years | Steve Carroll Interview

Steve Carroll is the co-founder and CEO of Kelso Industries, a commercial and industrial MEP (mechanical, electrical, and plumbing) roll-up platform he built from zero to over $1.2 billion in revenue across 31+ acquired companies in approximately five years. Carroll came from a construction background, spent seven years at Walmart's corporate headquarters learning large-scale operations, then set out to solve the fragmentation he had witnessed firsthand in the MEP trades on commercial job sites. After two failed attempts to buy small HVAC businesses via SBA loan — including one that collapsed when a key GM quit during diligence — he pivoted to a private equity-backed buy-and-build model with his business partner Steve Nicholson and Utah-based Peterson Partners. The first closed acquisition was a $17 million revenue Arizona HVAC/MEP business in May 2021; Carroll ran it hands-on as a 100-hour-a-week owner-operator before identifying the unlock: a partnership model in which Kelso acquires 60-80% of a target while the seller rolls 20-40% equity into Kelso and stays on as an autonomous operator. This model, first implemented with a Boise, Idaho partner, allowed Carroll to step out of day-to-day operations and focus on deal sourcing as platform CEO, reaching $10 million EBITDA after only about 18 months and seven or eight acquisitions. The key lessons Carroll emphasizes are: earn operator credibility by working deep in the industry before rolling up, resist forced integrations, use decentralized partnership structures rather than full absorption, and scale only as fast as you can find and trust the right partner-operators.

Deal facts

sde ebitda: $2m EBITDA at time of first acquisition (Arizona business)
revenue: $17m revenue (first acquisition, Arizona); $1.2 billion total (Kelso today, 31+ companies)
financing structure: Equity-only initially (no debt for over a year); funded by Peterson Partners (private equity, Salt Lake City); original SBA loan plan abandoned in favor of equity raise
notes: First acquisition closed May 28, 2021. Original SBA plan abandoned due to working capital gap on $17m revenue Arizona HVAC/MEP business. Raised private equity from Peterson Partners after realizing SBA $5m cap was insufficient. Goal at funding: grow from $2m to $10m EBITDA; achieved in approximately 18 months over ~7-8 acquisitions. Partnership model: acquire 60-80% of target, seller rolls 20-40% equity into Kelso. Over 100 shareholders as of interview date. Market estimated at $500-600 billion (MEP commercial/industrial). $10m EBITDA target later raised to $20-30m, then ultimately $1B+ revenue.

Why this business

Carroll grew up on a farm, studied construction, and spent his career in commercial general contracting where he saw firsthand how difficult it was to coordinate separate electrical, plumbing, and HVAC subcontractors on every project. He identified that integrated MEP (mechanical, electrical, plumbing) providers were extremely rare at scale, and believed that bringing those three trades under one roof would simplify the customer experience and create a durable competitive advantage. He wanted to serve customers across the full building lifecycle — construction, service, and maintenance — through what he calls the 'Kelso flywheel.'

What's working

Partnership model: acquiring majority stakes (60-80%) while keeping seller-owners on as autonomous operators who roll 20-40% equity into Kelso, aligning incentives and retaining operational expertise
MEP integration thesis: being one of the very few companies offering integrated mechanical, electrical, and plumbing services at scale in the commercial/industrial market, which is highly differentiated
Decentralized operating model: platforms initially run as standalone businesses with Kelso support functions layered in over time rather than forced integration from day one
Operator credibility: Carroll being a former industry insider and hands-on CEO (not just a financial sponsor) made it easier to win over seller-owners and close new business through personal relationships
Peterson Partners private equity backing: provided committed capital, reputational credibility, and the financial runway to pursue a buy-and-build roll-up at scale
Kelso flywheel cross-selling: labor and resources shared across portfolio companies (e.g., Arizona labor shipped to Utah partner for growth projects)
Talent from acquisitions stepping into broader roles: Idaho partner 'Poncho' took on oversight of Arizona operations, freeing Carroll to become platform CEO focused on M&A pipeline

What's hard

First attempted acquisition (small HVAC business, Fayetteville Arkansas) collapsed at the 11th hour when the GM quit during diligence after a fight with the seller, making the passive-income model unworkable
Second attempted acquisition (Arizona, $17m revenue) nearly fell apart because working capital needs — several million dollars — far exceeded what the SBA $5m loan cap could support, forcing a complete pivot to raising private equity
Day one of the first closed acquisition: Carroll ruptured his Achilles tendon Memorial Day weekend, the day after close, and had to fly to Arizona the next morning on a 5am flight and wheel himself through the airport to make it for the employee meeting
Easter eggs post-close: employees demanded raises the day after closing, claiming the prior owner had promised them; vendors tightened payment terms; a few bad jobs cost millions of dollars in losses
Sellers often left faster than expected and for different reasons than anticipated (wife didn't want to be involved, disputes), leaving new management with no transition support
Working 100-hour weeks for months running the Arizona business with no management layer, making it nearly impossible to simultaneously pursue additional acquisitions
Forced integration attempts (jamming companies into other companies) underperformed versus the partnership model; those add-ons had the worst outcomes
Early partnership model was ambiguous and required partners willing to tolerate uncertainty; integration needed to evolve significantly as the platform grew to 31+ companies
Building the MEP thesis required convincing investors: Peterson Partners initially resisted the multi-trade strategy and pushed back on buying the first electrical business

Notable quotes

You have indeed built Kelso over about 5 years into a business with north of a billion dollars in revenue, making it the largest business by a mile that has been featured on Acquiring Minds.

We are a commercial and industrial mechanical electrical and plumbing service provider.

The secret sauce that I believe has allowed us to scale at the rate we have... we needed to buy other companies. We needed to grow. We needed to do something. Buying companies made the most sense.

If you think you can build a billion-dollar business, why would you sell out at 10 million or even 20 million of ibata?

Go operate in the industry that you want to go work in. Learn the nuances before or during and become a part of the industry. Join the industry groups. Go to the events. Network.