Calgary-headquartered CoolIT Systems, a leading provider of liquid cooling solutions for AI data centers, is poised to be purchased by Ecolab, a U.S. company, for $4.75 billion US, marking one of the largest tech transactions in the city’s history. The acquisition will result in significant cash payouts for the company’s 650 employees, ranging from roughly one to over eight years’ worth of annual salaries, a development that was met with enthusiasm by employees during Wednesday’s celebrations.
Jerin Varghese, an engineer at CoolIT since 2021, expressed that the money will have a transformative impact on his life and his family’s future plans. The company, which was founded in a Calgary garage 25 years ago, was acquired by global investment firm KKR in 2023, with employees becoming owners of the business. CoolIT has experienced substantial growth due to the surge in demand for liquid cooling systems to support AI workloads in data centers.
CoolIT now serves hyperscalers and data center operators in more than 300 facilities worldwide. Upon the completion of the sale, employees are expected to receive average payouts of around $240,000 US each, with long-serving employees potentially receiving up to $380,000 US or eight times their current salaries. The acquisition will also provide employees with financial coaching and tax preparation services.
Ecolab anticipates CoolIT to generate approximately $550 million US in sales over the next year. The acquisition presentation by Ecolab highlighted the expected growth of the liquid cooling market by 10 times over the next decade. While concerns have been raised about the water consumption of data centers, CoolIT’s President and COO, Patrick McGinn, emphasized the company’s commitment to water efficiency and sustainable practices.
The acquisition is seen as a significant milestone for Calgary’s economy, with Brad Parry, president and CEO of Calgary Economic Development, noting that it showcases the city as a hub for scalable tech companies. CoolIT’s growth has been fueled by investments in Calgary and the increasing deployment of AI computers in data centers. Despite speculations about a potential AI bubble burst, McGinn remains optimistic about the sustained growth in their business and the ongoing hiring of more workers, predominantly from Calgary.
CoolIT’s success story highlights the potential for building and expanding global companies within Calgary, as the city emerges as a competitive destination for tech innovation and growth.