Calgary-headquartered CoolIT Systems, a specialist in liquid cooling solutions for AI data centers, is poised to be purchased by U.S.-based company Ecolab for $4.75 billion US, marking one of the largest tech acquisitions in the city’s history. The acquisition will result in significant cash payouts for the company’s 650 employees, ranging from approximately one year of their annual salaries to over eight years’ worth, with employees expressing excitement and gratitude for the life-changing financial windfall.
Jerin Varghese, an engineer who has been with CoolIT since 2021, shared his plans to utilize the money for paying off the mortgage, investments, family support, and a well-deserved vacation with his wife. Founded in 2001 in a Calgary garage, CoolIT was acquired by global investment firm KKR in 2023, with the company’s employees becoming part owners. CoolIT’s strategic position in the growing market for data centers handling large AI workloads has led to its success in providing essential liquid cooling systems for servers.
The company now serves hyperscalers and data center operators across more than 300 facilities worldwide, according to Mubadala. Following the acquisition, CoolIT employees are expected to receive average payouts of around $240,000 US each, with long-serving employees potentially receiving up to $380,000 US. In addition to financial rewards, employees will benefit from pre-paid personal financial coaching and tax preparation services.
KKR anticipates generating approximately 15 times its original equity investment through the sale, underscoring the profitability of the deal. CoolIT’s President and COO, Patrick McGinn, expressed optimism about the company’s future, emphasizing the synergies between CoolIT’s liquid cooling technologies and Ecolab’s water chemistry services to enhance operational efficiency and performance while promoting water conservation.
Ecolab projects CoolIT to achieve approximately $550 million US in sales over the next year, reflecting the company’s growth potential in the evolving data center industry. The acquisition aligns with Ecolab’s vision for the liquid cooling market to expand tenfold in the coming decade, driven by the transformative impact of AI on data center requirements.
Acknowledging concerns about water consumption by data centers, McGinn highlighted the importance of adopting sustainable practices in water usage within the industry. He emphasized CoolIT’s commitment to developing water-efficient cooling solutions to address environmental challenges. The acquisition is seen as a significant milestone in Calgary’s tech sector, heralding a positive outlook for future investments and economic growth in the city.
McGinn foresees continued expansion for CoolIT, with plans to hire more employees, particularly from Calgary. Despite speculation about a potential AI bubble, CoolIT remains optimistic about sustained growth due to the escalating demand for hardware and systems in data centers. The company’s success story serves as a testament to Calgary’s potential as a hub for global tech innovation and business scalability.
