Calgary-based CoolIT Systems, known for its expertise in liquid cooling solutions for AI data centers, is about to be purchased by Ecolab, a U.S. company, for $4.75 billion US. This acquisition marks one of the largest tech transactions in the city’s history. Upon completion of the deal, CoolIT’s 650 employees are expected to receive significant cash payouts, ranging from approximately one year to over eight years of their annual salaries. This news was met with joy and gratitude by the workforce during a celebratory event on Wednesday.
Jerin Varghese, an engineer at CoolIT since 2021, expressed that the financial windfall is “life-changing” for him and his family. He plans to allocate the funds towards paying off his mortgage, investing, and supporting his family and parents. Additionally, he mentioned that a vacation with his wife is on the horizon.
Established in 2001 in a Calgary garage, CoolIT Systems was acquired by KKR in 2023, with employees becoming partial owners. The company saw a surge in demand for liquid cooling systems due to the rise in data centers handling large AI workloads, such as OpenAI’s ChatGPT. CoolIT now caters to hyperscalers and data center operators in over 300 facilities worldwide.
After the acquisition, CoolIT employees are projected to receive average payouts of around $240,000 US, potentially reaching up to $380,000 US for long-serving staff. In addition to the financial rewards, employees will benefit from pre-paid personal financial coaching and tax preparation services.
KKR anticipates generating approximately 15 times the original equity invested from this sale. Patrick McGinn, CoolIT’s President and COO, expressed optimism about the company’s future, foreseeing continued growth and efficiency enhancements by integrating CoolIT’s liquid cooling technologies with Ecolab’s water chemistry services.
Ecolab forecasts that CoolIT will achieve around $550 million US in sales over the next year. The company expects the liquid cooling market to expand significantly in the next decade, driven by the transformative impact of AI on data centers.
While acknowledging concerns about water consumption by data centers, particularly in liquid cooling processes, McGinn emphasized the industry’s commitment to adopting more water-efficient practices. He highlighted CoolIT’s innovative direct-to-chip cooling technology as a sustainable solution.
Brad Parry, CEO of Calgary Economic Development, hailed the acquisition as a milestone for the city’s technology sector, signaling potential for increased investment and global competitiveness. McGinn noted CoolIT’s substantial growth in recent years, attributing it to the influx of capital in Calgary 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, fueled by the ongoing demand from data center operators. He envisions continued expansion and job creation within CoolIT, emphasizing the company’s commitment to Calgary’s workforce and its ability to thrive on a global scale.