Announced last month, KKR’s $4.75 billion sale of its data center liquid-cooling business, CoolIT Systems, to Ecolab will return roughly 15x its investment and is another big win for the firm and its employee-ownership initiatives.
KKR acquired a majority stake in the Calgary-based company in 2023 at a valuation of around $270 million, with Mubadala Investment Company also participating.
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If data centers are the ‘picks and shovels’ play for the AI boom, then CoolIT’s data center cooling business is ‘picks and shovels-squared’. The company’s systems tackle one of the biggest problems with heavy AI workloads: heat generation.
“We acted early on the conviction that rapid growth in computing demand would pose a significant challenge for data center efficiency, as traditional air-cooled systems can be incredibly energy- and water-intensive,” said Kyle Matter, managing director and head of North America Global Impact at KKR.
For context, KKR estimates that electricity demand from data centers could rise at a 13–15 percent CAGR and consume as much as 21 percent of global electricity by 2030, with thermal management accounting for more than 40 percent of data-center energy use.
With technology like CoolIT’s offerings, liquid-cooled data centers use 30–40 percent less energy for cooling than traditional air-cooled facilities and also reduce water use through a closed-loop system.
Founded in 2001, CoolIT got its start producing liquid cooling systems for gaming computers before moving into server and data-center applications. The company now services more than 300 data centers globally.
From KKR’s hold through the end of 2026, CoolIT is expected to deliver around 4x revenue growth (reaching $550 million of NTM sales) and more than 10x EBITDA growth.
Most of the story behind this investment is clearly market-driven growth (and the opportunity identification to take advantage of it). But KKR also put in work to ensure CoolIT was ready to service that demand.
Post-acquisition, KKR revamped the company’s management team to bring in capabilities aligned with its stage and trajectory. Most of those key hires were sourced through referrals from the firm’s industrials team, which tapped its network to find the right talent.
That team delivered against the operational demands required by such intense growth: since 2023, the firm said, CoolIT has doubled its workforce, added more than 300 jobs, expanded its manufacturing footprint to more than 300,000 square feet, and increased coolant distribution unit capacity by 25x.
Wrapping up the impressive performance was an enviable exit multiple. Ecolab said it’s paying around 29x NTM adjusted EBITDA and 24x 2027 adjusted EBITDA.
Based on the provided purchase price and revenue growth, it’s possible to back into an approximate KKR entry revenue multiple of around 2x. With EcoLab’s purchase coming in at roughly 9x NTM revenue, KKR is enjoying some incredible multiple expansion.
After seeing off competition from sponsors who couldn’t match such a lofty valuation, Ecolab plans to slot CoolIT into its Global Water segment and expects meaningful uplift from cross-sell — the combined business can sell coolant distribution units, cold plates, liquid loops, and rack manifolds into its existing customer base (doubling the company’s Global High-Tech segment market opportunity from $5 billion to $10 billion) and opens up CoolIT’s book of established relationships with hyperscaler and colocation clients.
The biggest win from the deal may belong to CoolIT employees, who stand to share in the windfall through equity received under KKR’s broad-based employee ownership program. KKR said the 650 employees will receive cash payouts ranging from about 1 year of annual pay to more than 8 years, averaging around $240,000.
The transaction is expected to close in the third quarter of 2026, subject to regulatory approvals.