CoolIT Systems, a Calgary-based company specializing in liquid cooling solutions for AI data centers, is on the brink of being purchased by Ecolab, a U.S. firm, for $4.75 billion US. This acquisition, considered one of the largest tech deals in the city’s history, will result in substantial cash payouts for CoolIT’s 650 employees, ranging from one to over eight years’ worth of annual pay. The employees, including engineer Jerin Varghese, who joined CoolIT in 2021, expressed excitement about the life-changing financial windfall, with plans to pay off mortgages, invest, and support their families.
Founded in 2001 in a Calgary garage, CoolIT was previously acquired by KKR in 2023, making employees partial owners. With the surge in demand for data centers capable of handling AI workloads, CoolIT’s liquid cooling systems have been in high demand. The company now serves over 300 facilities worldwide, catering to hyperscalers and data center operators.
Upon completion of the sale, 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. Additionally, employees will benefit from financial coaching and tax preparation services. KKR anticipates a substantial return on its investment through this sale.
CoolIT’s President, Patrick McGinn, expressed optimism about the company’s future, highlighting the synergies between CoolIT’s liquid cooling technologies and Ecolab’s water chemistry services. The combined expertise aims to enhance operational efficiency, performance, and water conservation for customers. Ecolab foresees CoolIT generating approximately $550 million US in sales over the next year.
The acquisition also sheds light on concerns about water usage in data centers, particularly related to liquid cooling. Christophe Beck, Ecolab’s CEO, emphasized the pivotal role of liquid cooling in enabling advanced computing driven by AI. McGinn acknowledged the industry’s focus on water conservation, affirming the potential for more sustainable data center designs moving forward.
Calgary Economic Development’s CEO, Brad Parry, hailed the acquisition as a milestone for the city’s tech sector, signaling opportunities for increased investment and global competitiveness. McGinn attributed CoolIT’s recent growth to investments in Calgary’s infrastructure and the rise in AI deployments in data centers, resulting in significant revenue and profit growth.
Despite speculation about a potential AI bubble burst, McGinn remains optimistic about sustained growth in the data center hardware industry. He envisions CoolIT’s continued expansion, with plans to hire more Calgarians and maintain the company’s presence in the city. Parry emphasized CoolIT’s success story as evidence that global companies can flourish in Calgary, fostering excitement about the city’s economic prospects.