Calgary-headquartered CoolIT Systems, a specialist in liquid cooling solutions for AI data centers, is on the verge of being purchased by U.S.-based Ecolab for $4.75 billion US, marking one of the largest tech transactions in the city’s history. The acquisition entails substantial cash payouts for the company’s 650 employees, ranging from roughly one to over eight years’ worth of annual salaries, a development that was enthusiastically received by staff members on Wednesday.
Jerin Varghese, an engineer at CoolIT since 2021, expressed his excitement about the financial windfall, describing it as “life-changing” for himself and his family. He outlined plans to use the money to pay off the mortgage, invest, support family and parents, and enjoy a vacation with his spouse.
Established 25 years ago in a Calgary garage, CoolIT was acquired by global investment firm KKR in 2023, turning its employees into business shareholders. The company also had Mubadala, an Abu Dhabi-based state-owned investment company, as a minority co-investor. With the surge in demand for liquid cooling systems to support AI workloads like OpenAI’s ChatGPT, CoolIT is well-positioned to benefit from the expanding market.
CoolIT now serves hyperscalers and data center operators across more than 300 facilities worldwide, as per Mubadala. Following the closure of the sale later this year, CoolIT employees are expected to receive average payouts of around $240,000 US each, with long-standing employees potentially receiving at least $380,000 US, which is eight times their salaries. Additionally, employees will receive financial coaching and tax preparation services.
KKR stated that the sale will yield about 15 times the original equity it invested. Patrick McGinn, CoolIT’s president and COO, expressed optimism about the company’s future, emphasizing the potential synergies between CoolIT’s liquid cooling technologies and Ecolab’s water chemistry services to enhance customer operations and efficiency.
Ecolab anticipates CoolIT to generate around $550 million US in sales over the next year. The company projects the liquid cooling market to expand tenfold in the next decade, driven by AI’s increasing demands on data centers. Christophe Beck, Ecolab’s chairman and CEO, highlighted the critical role of liquid cooling in enabling advanced computing through AI technologies.
While concerns have been raised about the water consumption of data centers, especially related to liquid cooling, McGinn acknowledged these worries and emphasized the importance of water conservation in the industry. He suggested that new data centers could be designed to be more water-efficient, leveraging technologies like CoolIT’s direct-to-chip cooling in closed-loop systems to reduce water usage.
Brad Parry, president and CEO of Calgary Economic Development, hailed the acquisition as a significant milestone for the city’s tech sector, signaling potential for increased investment and growth opportunities. McGinn emphasized CoolIT’s growth trajectory, attributing it to investments in Calgary and the surge in AI deployments in data centers, leading to a fourfold revenue increase and a tenfold profit rise.
Despite speculations about a potential AI bubble burst, McGinn remains optimistic about sustained growth in CoolIT’s business, citing continuous demand and expansion in the data center industry. He foresees CoolIT’s continued expansion and hiring of more Calgary-based employees, as the company recruits an average of five to ten individuals per week.
Parry highlighted CoolIT’s success story over decades, evolving from cooling systems for consumer gaming products to a global technology firm based in Calgary. He emphasized that companies like CoolIT demonstrate that it is possible to build and scale a successful global enterprise without leaving Calgary.