Calgary’s CoolIT Systems, known for its liquid cooling solutions for AI data centers, is on the verge of being purchased by Ecolab, a U.S. company, for $4.75 billion US, marking one of the largest tech transactions in the city’s history. This acquisition will result in substantial cash payouts for the company’s 650 employees, ranging from around one year to over eight years’ worth of annual salaries, a development that was enthusiastically received by workers at a recent celebration.
Jerin Varghese, an engineer at CoolIT since 2021, expressed his excitement about the life-changing impact of the money, detailing plans to pay off his mortgage, invest, support his family, and enjoy a vacation with his wife. Beginning its journey in a Calgary garage 25 years ago, CoolIT became owned by its employees after being acquired by KKR in 2023, with Mubadala serving as a minority co-investor.
The surge in demand for liquid cooling systems for AI-intensive data centers, such as those utilizing OpenAI’s ChatGPT, propelled CoolIT’s growth under KKR’s ownership. The company now caters to hyperscalers and data center operators across more than 300 facilities worldwide. Upon the completion of the sale, CoolIT employees are expected to receive an average payout of approximately $240,000 US each, with longstanding employees potentially receiving up to $380,000 US.
In a strategic move, KKR highlighted that the sale will yield a significant return on its initial investment. CoolIT’s President and COO, Patrick McGinn, expressed optimism about the company’s future, emphasizing the synergy between CoolIT’s liquid cooling technologies and Ecolab’s water chemistry services to enhance operational efficiency and performance for customers while promoting water conservation.
Ecolab foresees CoolIT generating sales of about $550 million US in the next year. The acquisition presentation by Ecolab anticipates a tenfold growth in the liquid cooling market over the next decade. While acknowledging concerns about water consumption in data centers, particularly related to liquid cooling, McGinn emphasized the potential for more water-efficient designs in future data center constructions.
The acquisition of CoolIT by Ecolab has garnered attention as a significant milestone in Calgary’s tech industry. Brad Parry, CEO of Calgary Economic Development, views this deal as a catalyst for attracting more capital to the city and establishing Calgary as a hub for global competitiveness. CoolIT’s growth has been fueled by investments in Calgary’s manufacturing capabilities and the escalating deployment of AI computers in data centers.
Despite speculations about a potential AI bubble burst, McGinn remains confident in the sustained growth of CoolIT’s business, citing the continuous increase in demand for their hardware and systems by data center operators. He envisions CoolIT expanding its workforce, predominantly hiring local talent, to meet the escalating demands of the market. Parry commended CoolIT’s success story, underscoring that building and scaling a global company like CoolIT from Calgary exemplifies the city’s potential for fostering tech innovation.
