In today's episode we have Steve Carroll, CEO and Co-Founder of Kelso Industries, join us to share his journey from a small-town construction background to leading a 25-acquisition HVAC roll-up. We dive into his Walmart days scaling EBITDA from $15M to $250M, his views on where PE firms get it wrong, and how Kelso’s long-term partnership model is flipping the script on traditional roll-ups.

[00:00] Steve Carroll joins to discuss Kelso Industries' growth from 1st to 25th acquisition

[00:27] Background: Walmart experience and scaling from $15M to $250M EBITDA

[00:54] Early years: rural Oregon, construction, MBA, and entrepreneurial itch

[01:50] Lessons from Walmart and foundation of Kelso

[02:21] Mistake PE firms make: copying each other, bidding up same assets

[03:05] Advice: PE should pursue untapped markets and take first-mover risks

[04:21] Kelso's differentiator: deep focus on one long-term strategy

[05:49] “All in” mindset and scaling Kelso as one big platform

[06:18] First acquisition story: moving to AZ, transition challenges

[07:46] Struggles, COVID, and lessons learned from initial takeover

[08:43] Pivot to partnership model after burnout and realization

[09:42] Defining partnership: skin in the game, shared long-term vision

[11:08] Case study: Pancho in Idaho becomes the blueprint for future deals

[13:03] Criteria for Kelso partnerships and alignment with long-term goals

[14:00] Integration learnings: then vs. now at deal #25

[14:50] Kelso now offers finance, legal, HR, recruiting, and systems support

[17:44] Operational push: MEP+ and one-call solution model

[18:43] Scale enabling better integration and centralized resources

[19:12] Raw Selection salary reports plug

[20:11] Top 3 learnings: partnership, finance investment, data center boom

[23:23] Walmart story: monetizing eyeballs, retail media, Sam’s Club success

[26:17] Building a $250M EBITDA business unit through creative thinking

[27:42] Why HVAC: passion, mission-critical systems, smartest people on site

[28:49] Key influence: Brad Jacobs and “How to Make a Few Billion Dollars”

Connect with Steve Carroll on LinkedIn. Thanks for tuning in.

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Got feedback or questions? Email Alex at alex.rawlings@raw-selection.com. Until next time—keep smashing it!

From the first HVAC Services acquisition to the 25th with Steve Carroll

The Private Equity Podcast, by Raw Selection

From the first HVAC Services acquisition to the 25th with Steve Carroll