From Walmart to a Billion-Dollar MEP Empire: How Steve Carroll Built Kelso Industries

In just five years, Steve Carroll and his business partner, Steve Nicholson, built Kelso Industries, a commercial Mechanical, Electrical, and Plumbing (MEP) service provider that currently generates over $1.2 billion in revenue. Through a relentless strategy of partnering with existing owners rather than executing hostile takeovers, Carroll has acquired 31 companies across the United States.

Here is how a former Walmart corporate employee turned a disastrous first attempt at business ownership into a billion-dollar platform.

Carroll grew up on a tree farm in Sandy, Oregon, where he learned to fix the tractors he broke. He studied construction management at BYU and began his career as a project engineer for a large general contractor in California.

In the construction world, the general contractor is responsible for coordinating dozens of subcontractors — drywall, paint, and structural steel. But the most critical path in any commercial build is the MEP trades: Mechanical (HVAC), Electrical, and Plumbing.

"These things are always working together," Carroll explained in one appearance on the Acquiring Minds Podcast. "You need electricity in order to power the HVAC... But it's almost always a different company that you're dealing with."

This fragmented coordination often leads to scheduling delays, cost overruns, and on-site chaos. Carroll envisioned a single, integrated MEP company that could handle all three trades seamlessly for general contractors and property managers. However, realizing he couldn't build this from the bottom up as a project engineer, he left construction to get his MBA.

He landed at Walmart’s corporate headquarters in Bentonville, Arkansas, spending seven years across marketing, retail, and merchandising. He learned how to think about massive scale and absorbed the servant-leadership culture left behind by Sam Walton. Yet, the entrepreneurial itch remained.

In 2019, while still working at Walmart, Carroll partnered with his childhood friend, Steve Nicholson, to buy a business. Their initial plan was conventional: use an SBA loan to buy a small HVAC company and hire a General Manager to run it passively.

Carroll found a $700,000 revenue HVAC business in Fayetteville, Arkansas. He negotiated a deal with the owner and arranged for the existing General Manager to stay and run the company.

Desperate to save the deal, Carroll scrambled to find a replacement. He found a promising candidate and signed an employment agreement. Days later, the candidate backed out due to family obligations. Simultaneously, the office manager demanded a $40,000 raise just to keep the doors open.

"I just remember thinking, man, this entrepreneurship thing is really hard. I can't do this," Carroll recalls. At the 11th hour, he pulled the plug on the deal.

It was a devastating, expensive failure — but it taught him a crucial lesson: Small businesses cannot be run passively by absent owners.

Realizing they needed to buy a business with enough scale to have a redundant management layer, the two Steves targeted a much larger commercial HVAC business in Arizona, generating $17 million in revenue and $2 million in EBITDA.

However, during due diligence, they discovered a fatal flaw. The seller was keeping all Accounts Receivable and Accounts Payable. In commercial construction, where it can take 90 days to get paid, working capital requirements are enormous. The business needed millions of dollars in working capital just to survive the transition — far exceeding the $5 million limit of an SBA loan.

Faced with losing another deal, Nicholson suggested they raise institutional capital. Over a single weekend, they built a pitch deck and sent it to Peterson Partners, a Salt Lake City-based private equity firm.

Because they were now asking for institutional money, their vision had to expand. They couldn't just promise to pay down a loan; they had to project massive growth. They pitched a plan to take the Arizona business from $2 million to $10 million in EBITDA within five years through organic growth and M&A.

Peterson Partners agreed to back them. In May 2021, they closed on the Arizona business, Grazak Mechanical (now Advanced HVAC Arizona).

The weekend after closing Grazak Mechanical, Carroll ruptured his Achilles tendon playing basketball in Arkansas. He crawled through the Dallas airport in a wheelchair to make a 5:00 AM flight so he wouldn't miss his day-one speech to his new employees in Arizona.

The transition was brutal to say the least. The former owners exited almost immediately. Carroll discovered hidden "Easter eggs": employees demanding promised raises, vendors restricting credit terms, and bad contracts that lost millions of dollars.

Carroll moved into a shared residence with Nicholson in Arizona, working 100-hour weeks. "I'm in there at 4:30, 5:00 a.m. every day when the shop opens, and I'm the last person there," he says.

They realized they were trapped. They had promised their investors they would grow to $10 million in EBITDA, but they were drowning in day-to-day operations. They couldn't move to a new state to run a second acquisition. They needed a new model.

The breakthrough came when they approached a commercial HVAC owner in Boise, Idaho, whose business was three times larger than their Arizona operation.

Instead of offering a traditional buyout where the owner leaves, Carroll pitched a partnership.

"I wasn't coming to him that I was going to tell him what to do," Carroll shares. "I was coming to him and saying, 'Can we work together? I have some resources. I have a vision... 1 plus 1 equals three.'"

The Kelso Partnership Playbook:

The Idaho owner agreed. This decentralized partnership model was the keystone that unlocked hyper-growth. Because Carroll didn't have to personally operate the newly acquired businesses, he could elevate himself to the role of HoldCo CEO, dedicating his time entirely to M&A and capital allocation.

With the partnership model proven, the flywheel began to spin.

They hit their initial $10 million EBITDA goal in just 1.5 years, ahead of time. Emboldened, Carroll pitched Peterson Partners on a new, audacious goal: A billion dollars in revenue. To achieve this, Kelso Industries expanded beyond HVAC, acquiring electrical and plumbing contractors to fulfill Carroll's original vision of a true, integrated MEP platform. They built a decentralized corporate structure where local presidents run their P&Ls while tapping into Kelso's shared services for back-office support.

Today, Kelso Industries handles 10,000 jobs across 3,000 customers nationwide, generating over $1.2 billion in revenue.

When asked if he plans to sell out to a massive private equity juggernaut, Carroll’s response reflects the ambition that drove him from a tree farm to C-suite:

"Our goal is to be so big that the juggernauts can't buy us."