Peterson Partners has closed a $510 million capital raise for a continuation vehicle tied to Kelso Industries, the Draper-based mechanical, electrical and plumbing (MEP) contractor it has backed since 2021. NorthSands Capital, a New York investment firm, served as sole lead investor and committed more than $450 million to the deal.
The transaction, announced Sept. 9, restructures how Peterson holds its stake in Kelso rather than selling the company outright. Peterson Partners Fund X, the firm’s current flagship private equity fund, rolled its existing position into the new vehicle, called Peterson Kelso Coinvest, LP, and added fresh capital on top of it.
Kelso was founded in 2021 through Peterson Partners’ partnership with co-founders Steve Carroll and Steve Nicholson. The company now operates in more than 40 states with more than 4,000 employees, serving a mix of commercial, institutional and industrial clients — among them data center operators, healthcare systems, airports and advanced manufacturers. Kelso passed $1 billion in annual revenue and 31 completed acquisitions as of October 2025, up from a single Arizona company doing $17 million in revenue that Carroll acquired the year Kelso launched.
Why a continuation vehicle, and why now
Single-asset continuation vehicles let a private equity sponsor keep a high-performing portfolio company for longer while giving existing limited partners the option to cash out or roll forward. The structure has moved from a niche tool to a mainstream exit path: GP-led continuation vehicle volume hit a record $106 billion in 2025, a roughly 51% increase over the prior year, as sponsors increasingly use the deals to extend ownership of high-performing assets.
“Since Kelso’s founding in 2021, the Company has established itself as a leading national MEP services provider through a combination of strategic acquisitions, de novo expansion and investments in people, systems and operational excellence,” says Spencer Clawson, partner at Peterson Partners. “We believe the Company remains in the early innings of a significant opportunity, and we are excited to partner with NorthSands as we continue to support the team.”
Kelso is not Peterson’s first appearance in the deal press: The firm highlighted the company as one of three initial investments out of its $265 million Fund X when that vehicle closed in May 2024, when Kelso was described simply as “a leader in commercial mechanical, electric and plumbing services.” The jump from an early-stage Fund X bet to a $510 million continuation deal in just over two years reflects how fast the roll-up has scaled.
NorthSands brings its own track record in the structure. The firm was founded in 2023 by Bruce McEvoy, a former senior managing director at Blackstone who spent 16 years there working on deals including Vivint Smart Home and Vivint Solar, two other Utah-founded companies. NorthSands has since led continuation vehicles for Wellspring Capital’s SupplyOne and co-led, alongside Painswick Capital, a $199 million deal for Pike Street Capital’s Impel Company in March 2025.
“Building Kelso from the ground up has been the opportunity of a lifetime, and we are grateful to Peterson Partners for their continued support,” said Steve Carroll and Steve Nicholson, co-founders of Kelso Industries, in the announcement. “We have a tremendous team of leaders across the country, and we believe the opportunity ahead remains substantial. We look forward to partnering with Peterson and NorthSands as we continue to build the nation’s preferred MEP solutions partner.”
Proceeds will fund further acquisitions, hiring and expansion into new markets, according to the companies. Jefferies served as exclusive financial advisor to Peterson, while Mayer Brown and Honigman LLP advised Peterson, and Kelso and Kirkland & Ellis LLP represented NorthSands.
This article was adapted from a press release by an automated tool and reviewed and edited by an editor for accuracy before publication.
