What Scales Faster in an Acquisition?

Hello home service operators,

There’s more than one way to tackle the immediate post-acquisition handoff. Here are your two basic options: partner-led buyout or a straight takeover. Either way, your path starts during negotiations.

Below, I share tips and tricks from the guy who scaled Kelso Industries from $0 to over $1B in mechanical, electrical, and plumbing. And all it took was 29 acquisitions in five years.

But let me hit you with some killer resources first…

• From $700K to $30M with multiple locations

• Interesting stats about expected HVAC industry growth by 2030

• Here’s why thousands of home service companies choose FieldPulse over its competitors

• Don’t forget to check out the ServiceTitan 2025 Consumer Trends in the Trades Report

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Partnerships Scale Faster Than Takeovers

Acquisitions are one of my favorite topics, which is why I had Steve Carroll from Kelso Industries join me on my podcast.

In five years he went from the first deal to roughly $1.2B and 3,500 employees. The way he did it is simple to say and hard to copy: keep great operators in the seat and give them room to win.

Start with construction, then let the flywheel turn

Steve’s team started by winning the first job in commercial and industrial work. From there, they expanded into retrofit, sold a maintenance program, and kept the relationship through service. Mechanical, electrical, and plumbing fed one another, so a single entry point often became a 20-year client.

Do not replace the owner if you do not have to

On my first deal, the sellers were gone two weeks after close, and we were estimating jobs and chasing payments.

By contrast, Steve’s model kept the owner in the seat with equity at close and limited cash, so customers, vendors, and the team kept momentum from day one.

Local leaders own the P&L. HQ removes friction

Branches make the daily calls on revenue and delivery. Corporate handles what drags them down or protects the enterprise. That means cash management, insurance, bonding, and targeted HR help so operators can focus on work that pays.

Model cash like your business depends on it

One deal fell apart for Steve when working capital needs came in at 10x the figure on paper.

In commercial, accounts receivable can sit near 90 days. If you are not forecasting cash and working capital, you are guessing. And guessing isn’t a strategy.

Know what is a platform and what is an add-on

Steve thinks in people, not just revenue. Around 100 employees feels like a stand-alone platform. Smaller shops can be excellent add-ons, but only if they do not need a full corporate spine to stand up.

Balance demand like an index

Kelso spreads work across three lanes.

• Industrial: data centers, manufacturing, food and beverage. They are doing mechanical for the first U.S. Lego plant.

• Institutional: hospitals and schools with a municipal element.

• Commercial: big distribution, restaurants, and apartments.

When one slice grows, they build the others so nothing over-indexes.

Integrate lightly, then evolve the playbook

Early days looked like a holdco with cash centralized. Over time they added what scale requires, like insurance and bonding, and shared capabilities where it helps.

The goal is the same each time: protect the enterprise and keep operators moving.

Make HR a real partner

At size, HR is more than onboarding and terminations. Reviews, sentiment checks, recruiting help, and people support lift local leaders. That matters when you are spread across 30-plus offices.

My takeaway

If you want speed without chaos, buy great operators and keep them operating.

Win construction, expand into retrofit, maintenance, and service, and centralize only what protects cash and reduces risk. Do it across balanced end markets and growth soon compounds.

Want to learn more? Watch the entire episode.

Don’t Lose Another Phone Lead

Miss a call, miss out on potential revenue. It really is that simple.

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Help Me Out

You may have already answered one or more of these survey questions. If so, thanks. If not, could you take a couple seconds to do so? It helps me better tailor content to my audience.

I encourage you to watch the entire podcast episode so that you fully understand what can happen when you prioritize a partnership approach in an acquisition.

👊 John

Disclosure: Some of the content and links in this newsletter are sponsored or affiliate links, which means we may receive payment or earn a commission if you click through or purchase. However, all opinions expressed are entirely my own.

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