Peterson Partners has raised $510 million through a new investment vehicle focused on Kelso Industries, extending its ownership in the Utah-based mechanical, electrical and plumbing services company.
The transaction centers on Peterson Kelso Coinvest LP, a single-asset continuation vehicle. The structure allows Peterson Partners to keep holding Kelso beyond the life or preferred holding period of an existing fund, while also giving some existing investors liquidity and supplying additional capital for future growth.
New York City-based NorthSands Capital committed more than $450 million as the sole lead investor in the deal. Peterson Partners rolled its existing Fund X Kelso investment into the new vehicle and added more capital.
Kelso Industries was founded in 2021 by childhood friends Steve Carroll and Steve Nicholson, with backing from Peterson Partners. The company was created to build a unified mechanical, electrical, plumbing, HVAC and related installation, maintenance and repair services organization for businesses across the United States.
Since then, Kelso has expanded quickly. The company has grown to more than $1 billion in annual revenue, employs more than 4,000 people, operates across more than 40 states, and has acquired ~30-40 businesses.
That marks a sharp increase from late 2023, when Paceline Equity Partners said Kelso had completed roughly 14 acquisitions and employed about 1,700 people at the time of Paceline’s $50 million investment.
Kelso hit $1 billion in annual revenue in 2025.
The $510 million transaction is not simply a financing round for Kelso. It described the deal as both a liquidity event for some existing investors and a source of fresh capital for the company’s next phase.
Peterson said the proceeds will support additional acquisitions, investment in people and capabilities, and expansion into new markets and business opportunities.
Paceline Equity Partners announced on that its structured preferred equity investment in Kelso had been redeemed in full in connection with the continuation transaction. Financial terms were not disclosed.
Several other financial details still have not been disclosed: those include Kelso’s valuation, how much of the $510 million will provide liquidity to existing investors vs. fund future growth, and the post-transaction ownership positions of several investors.
Kelso is a portfolio company of Peterson Partners’ Fund VIII and Fund X, as well as Oxbow Equity Partners.
Peterson Partners could have pursued an outright sale of its Kelso stake after helping build the business from its 2021 launch into a nationwide company with more than $1 billion in annual revenue. Instead, Peterson created a new vehicle around Kelso, rolled its Fund X ownership into it, invested additional money, and brought in NorthSands Capital for more than $450 million.
This provides more runway for future growth and expansion, along with additional acquisitions still part of the plan.
