CoolIT Systems, a Calgary-based company specializing in liquid cooling solutions for AI data centers, is on the verge of being purchased by Ecolab, a U.S. firm, for $4.75 billion US, marking one of the largest tech acquisitions in the city’s history. This acquisition will result in significant cash payouts for CoolIT’s 650 employees, ranging from around one year to over eight years’ worth of annual salaries, which was warmly received by the workforce.
Engineer Jerin Varghese, who has been with CoolIT since 2021, expressed his excitement about the life-changing financial windfall, outlining plans to pay off his mortgage, invest, and support his family and parents, with a vacation also on the agenda. CoolIT, established in 2001 in a Calgary garage, had been acquired by KKR in 2023, turning its employees into business owners. The company’s focus on liquid cooling systems for AI-driven data centers positioned it well to meet the rising demand for efficient cooling solutions.
CoolIT now serves clients globally, with Mubadala noting its presence in over 300 facilities. Following the sale, employees are poised to receive an average payout of $240,000 US each, with long-serving staff potentially receiving up to $380,000 US. In addition to financial rewards, employees will benefit from personalized financial coaching and tax preparation services. KKR anticipates a substantial return on investment from the sale.
Patrick McGinn, CoolIT’s President and COO, expressed optimism about the company’s future, highlighting the synergy between CoolIT’s liquid cooling tech and Ecolab’s water management services to enhance customer efficiency and performance while promoting water conservation. Ecolab foresees CoolIT contributing about $550 million US in sales over the next year.
The acquisition presentation by Ecolab indicated a projected 10-fold growth in the liquid cooling market over the next decade. CEO Christophe Beck emphasized the pivotal role of liquid cooling in enabling advanced computing powered by AI. Concerns have been raised about the water usage of data centers, especially in liquid cooling applications, prompting industry players to consider more sustainable practices.
McGinn acknowledged the water usage concerns and emphasized the potential for improved water efficiency in data center operations. CoolIT’s innovative direct-to-chip cooling technology offers a more water-efficient alternative to traditional cooling methods. The acquisition deal is seen as a significant milestone for Calgary’s tech industry, signaling potential for further growth and investment in the city’s tech sector.
CoolIT’s growth in recent years has been driven by investments in Calgary’s manufacturing capabilities and the expanding deployment of AI systems in data centers. Despite speculations about a potential AI market bubble, McGinn remains optimistic about sustained growth, citing the increasing demand for hardware and systems in data centers. He anticipates CoolIT’s continued expansion and recruitment of local talent in Calgary. The success of CoolIT serves as a testament to Calgary’s ability to nurture and scale tech companies on a global level.