Paceline Equity Partners Fully Realizes its Investment in Kelso Industries

DALLAS--(BUSINESS WIRE)--Affiliates of Paceline Equity Partners, LLC ("Paceline"), a Dallas-based private equity manager, today announced the full realization of their structured preferred equity position in Kelso Industries ("Kelso" or the "Company"), a leading national provider of mechanical, electrical, and plumbing ("MEP") services. Paceline's investment was redeemed in full in connection with the closing of a continuation vehicle for Kelso by the Company's financial sponsor, Peterson Partners. Financial terms were not disclosed.

In November 2023, Paceline provided $50 million of structured preferred equity to Kelso through a bilaterally negotiated transaction. Paceline’s investment funded a transformative acquisition at a critical inflection point when the Company was scaling rapidly. The structure gave Kelso the flexibility to pursue growth while affording Paceline with downside protection and direct participation in the Company's upside.

Since Paceline invested, Kelso grew from a regional platform into one of the largest commercial MEP contractors in the United States, expanding to more than 4,000 employees operating across more than 40 states and serving data centers, healthcare facilities, airports, advanced manufacturing, and other mission critical infrastructure. During this period, Paceline was an active partner, serving on the Company’s board of directors and supporting Kelso’s add-on acquisition strategy.

"Kelso is emblematic of the investment opportunity Paceline is built for: a founder-led business at an inflection point, sourced through our deep industry networks, where we could execute with speed and certainty,” said Sam Loughlin, Chief Executive Officer of Paceline. "Kelso’s co-founders, Steve Carroll and Steve Nicholson, and the Peterson team have built a remarkable company, and we are proud of what we have achieved together, funding the acquisitions that scaled its growth and turned it into a strong national platform."

Leigh Sansone, Chief Investment Officer of Paceline, added, "This investment reflects Paceline’s disciplined approach to structuring. We designed an investment solution that enabled Kelso to accelerate its growth and capture opportunities at scale while protecting our position. Throughout the hold, we remained actively engaged as a board member and capital partner, working alongside management as the Company executed its acquisition strategy. Realizing this investment a full year ahead of our underwritten exit, and ahead of our underwritten return, reflects the outcome that structure was designed to produce. We congratulate Steve, Steve, and the entire Kelso team and wish them continued success."

About Paceline Equity Partners

Paceline is a Dallas-based private equity manager focused on value-oriented, opportunistic, and special situations investments across corporate credit, private equity, and real assets. Paceline's senior leadership team has worked together for nearly 20 years and manages approximately $1.7 billion in equity commitments on behalf of a global investor base. To learn more, please visit www.pacelineequity.com.

About Kelso Industries

Kelso Industries is a leading national provider of mechanical, electrical, and plumbing services to commercial, institutional, and industrial customers. Founded in 2021 and headquartered in Draper, Utah, Kelso operates across more than 40 states with more than 4,000 employees and supports customers throughout the full building lifecycle, from new installation through ongoing maintenance and service.