Calgary-headquartered CoolIT Systems, known for its expertise in liquid cooling solutions for AI data centers, is poised to be purchased by U.S.-based firm Ecolab for $4.75 billion US, marking a significant milestone as one of the largest technology acquisitions in the city’s history.
Upon completion of the acquisition, the company’s 650 employees are set to receive substantial cash payouts, ranging from approximately one year to over eight years’ worth of annual pay. This announcement 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 gratitude, stating that the financial windfall is “life-changing” for him and his family. He outlined plans to pay off the mortgage, invest, and prioritize family needs, including a well-deserved vacation with his spouse.
Established in 2001 in a Calgary garage, CoolIT was acquired by global investment firm KKR in 2023, with employees becoming partial owners in the company. The surge in demand for liquid cooling systems in data centers handling extensive AI workloads, such as OpenAI’s ChatGPT, propelled CoolIT’s growth trajectory.
Currently serving hyperscalers and data center operators across more than 300 facilities worldwide, CoolIT is positioned favorably to meet the escalating demand for liquid cooling solutions. The impending acquisition is expected to result in average payouts of around $240,000 US per employee, with longstanding staff members potentially receiving up to $380,000 US.
In a strategic move, Ecolab anticipates CoolIT to achieve approximately $550 million US in sales over the next year, further solidifying its market position. The merger aims to leverage CoolIT’s liquid cooling technologies with Ecolab’s water chemistry services to enhance operational efficiency and performance, while promoting water conservation efforts.
On the environmental front, concerns have been raised regarding the water consumption of data centers, particularly in the context of liquid cooling. CoolIT’s president and COO, Patrick McGinn, acknowledged these concerns and emphasized the importance of adopting water-efficient practices in data center operations.
The acquisition is viewed as a significant milestone for Calgary’s economy, signaling the city’s emergence as a hub for technological innovation and growth. Industry experts believe that the deal will attract more investments to Calgary and position the city as a global business destination.
Amidst the burgeoning demand for AI technologies, CoolIT has experienced substantial growth, driven by investments in Calgary and the surge in AI computing deployments. With revenue quadrupling and profits increasing tenfold, CoolIT remains optimistic about its future prospects and expansion plans.
Despite speculations about a potential AI market bubble, CoolIT remains optimistic about sustained growth, citing the continuous rise in demand for hardware and systems from data center operators. The company envisions continued expansion and plans to recruit more employees, contributing to Calgary’s economic vitality.
Indeed, CoolIT’s success story exemplifies Calgary’s potential to nurture and scale global technology enterprises, dispelling the notion that companies need to relocate to thrive on a global scale.