CoolIT Systems, a company based in Calgary known for its expertise in liquid cooling solutions for AI data centers, is on the verge of being purchased by Ecolab, a U.S. firm, for a substantial sum of $4.75 billion US. This acquisition marks one of the most significant tech transactions in the city’s history.
Upon finalization of the deal, the 650 employees of CoolIT are expected to receive generous cash payouts, ranging from approximately one year’s salary to over eight years’ worth. This news was met with excitement and gratitude by the employees, including Jerin Varghese, an engineer at CoolIT since 2021, who described the financial windfall as “life-changing” for himself and his family.
The company, founded 25 years ago in a Calgary garage, was acquired by KKR in 2023, with Mubadala also serving as a minority co-investor. CoolIT experienced a surge in demand for its liquid cooling systems as data centers, handling large AI workloads, saw a significant increase in investments.
CoolIT now caters to hyperscalers and data center operators across more than 300 locations worldwide. The impending acquisition is expected to result in an average payout of around $240,000 US for CoolIT employees, with long-serving staff potentially receiving up to $380,000 US.
The sale is projected to yield substantial returns for KKR, with CoolIT’s President and COO, Patrick McGinn, expressing optimism about the company’s future prospects in collaboration with Ecolab. The combined expertise of CoolIT in liquid cooling technologies and Ecolab’s water chemistry services is aimed at enhancing operational efficiency and performance while promoting water conservation.
Ecolab anticipates that CoolIT will generate approximately $550 million US in sales over the next year. The liquid cooling market is projected to experience tenfold growth in the next decade, reflecting the increasing demand for advanced computing technologies.
While concerns have been raised about the water consumption of data centers, McGinn highlighted the potential for more sustainable water usage in the industry. CoolIT’s innovative cooling technology can be integrated into closed-loop systems to reduce water consumption significantly.
The acquisition of CoolIT by Ecolab signifies a significant milestone for Calgary’s tech sector, with Brad Parry of Calgary Economic Development viewing it as a catalyst for attracting further investment to the city. Despite speculation about a potential AI bubble burst, McGinn remains confident in the sustained growth of their business, emphasizing the continued demand for hardware and systems in data centers.
Looking ahead, CoolIT plans to expand its workforce and maintain its presence in Calgary, demonstrating that global success can be achieved without leaving the city.