Calgary-headquartered CoolIT Systems, known for its expertise in liquid cooling solutions for AI data centers, is poised for acquisition by Ecolab, a U.S. company, for a hefty sum of $4.75 billion US. This acquisition marks one of the most significant tech transactions ever seen in the city.
Upon completion of the acquisition, CoolIT’s 650 employees are in line to receive substantial cash rewards, with payouts ranging from roughly one year to over eight years’ worth of their annual salaries. This news was met with jubilation by employees during a celebratory event on Wednesday.
Jerin Varghese, an engineer who has been with CoolIT since 2021, expressed his excitement over the life-changing financial windfall, outlining plans to pay off his mortgage, invest, and provide for his family and parents. Additionally, a well-deserved vacation with his wife is on the horizon.
Established in a Calgary garage 25 years ago, CoolIT was acquired by global investment firm KKR in 2023, transforming its employees into business owners. The company, which initially focused on cooling tech for consumer gaming products, quickly adapted to the surging demand for liquid systems essential for cooling server racks handling large AI workloads like OpenAI’s ChatGPT.
Today, CoolIT caters to hyperscalers and data center operators across more than 300 facilities globally, positioning itself to leverage the escalating demand for liquid cooling systems. The impending sale is expected to result in an average payout of around $240,000 US per employee, with long-serving staff possibly receiving up to $380,000 US, eight times their salaries.
Additionally, employees will benefit from pre-paid personal financial coaching and tax preparation services to manage their newfound wealth effectively.
KKR anticipates a substantial return on its investment, approximately 15 times the original equity injected into CoolIT. Patrick McGinn, CoolIT’s President and COO, expressed optimism about the company’s future, emphasizing the seamless integration of CoolIT’s liquid cooling technologies with Ecolab’s water chemistry services to enhance operational efficiency, performance, and water conservation for customers.
Ecolab foresees CoolIT generating approximately $550 million US in sales over the next year, underscoring the growth potential in the liquid cooling market. Christophe Beck, Ecolab’s Chairman and CEO, highlighted the pivotal role of liquid cooling in enabling advanced computing driven by AI technologies.
While concerns have been raised about the water consumption of data centers, McGinn acknowledged the industry’s focus on water conservation. He emphasized the potential for more water-efficient data center designs in the future, possibly integrating CoolIT’s direct-to-chip cooling technology within closed-loop systems to reduce water usage significantly.
Brad Parry, President and CEO of Calgary Economic Development, hailed the acquisition as a milestone in Calgary’s tech landscape, signaling the city’s attractiveness for global businesses seeking to scale up. McGinn emphasized CoolIT’s sustained growth, buoyed by investments in Calgary and the surge in AI-powered computing deployments in data centers.
Despite speculation about an impending AI bubble burst, McGinn remains bullish on the industry’s growth trajectory, citing sustained demand for hardware and systems from data center operators. He envisions continued expansion at CoolIT, with plans to recruit more staff, primarily from Calgary.
Parry echoed the sentiment, emphasizing CoolIT’s success story as proof that Calgary is a conducive environment for building and expanding global tech companies without needing to relocate.
