Valued at RMB 10 billion, this data center thermal management company is up for sale.

Phononic was founded in 2009 by Tony Atti, a former NASA researcher; Matt Trevithick, a former Venrock partner; and Professor Patrick McCann of the University of Oklahoma. The company develops thermoelectric coolers applied across diverse cooling-demanding scenarios—including smart mattresses and logistics containers—and counts Thermo Fisher and Futai Technology among its partners. It also collaborates with Fabrinet to scale up manufacturing across the Asia-Pacific region. Since its founding, Phononic has completed multiple funding rounds, with investors including Oaktree Capital, GGV Capital, Qiming Venture Partners, Venrock, and Goldman Sachs. Phononic LinkedIn page Amid the rapid advancement of AI over the past two years, Phononic has shifted its business focus toward data center thermal management. In mid-November last year, the company launched an AI data center cooling solution. Its thermal management technology differs from mainstream liquid-cooling solutions currently deployed in data centers. Conventional liquid cooling requires pumps to deliver coolant to cold plates attached to servers, whereas Phononic’s thermal management modules—centered on thermoelectric coolers (TECs)—can be directly mounted onto high-bandwidth memory chips and graphics processing units (GPUs), enabling localized cooling for chip clusters. These modules are compatible with air- and water-cooling systems alike. In 2022, Phononic’s prior valuation stood at just $600 million; its current valuation has more than doubled—a further illustration of how AI-driven demand is inflating valuations across industrial technology firms. Terms of the potential transaction remain under discussion, and Phononic may abandon the sale altogether in favor of raising additional capital. Over the past two years, AI companies’ demand for data centers has been enormous. The explosive growth of the AI industry has triggered a global data center construction boom.

Profit of RMB 30 billion in three years—KKR is exiting again.

(ID: PE-China) By Wei Yajun Photography: Bob KKR (including co-investors) achieved a paper return of over 17x in three years. A textbook-perfect exit. Recently, Ecolab Inc.—a global leader in water treatment and sustainable development solutions—announced it will acquire CoolIT Systems, a developer of data center liquid-cooling systems, for approximately USD 4.75 billion in cash (roughly RMB 32.8 billion). CoolIT Systems is currently majority-owned by funds managed by KKR. In May 2023, KKR—alongside co-investors—acquired a majority stake in CoolIT Systems for about USD 270 million. The transaction is expected to close in Q3 2026. An expensive acquisition Valuation far exceeds traditional industrial benchmarks Judging by deal terms, this acquisition carries a notably 'expensive' valuation. According to available information, the USD 4.75 billion purchase price represents roughly 29x CoolIT’s projected adjusted EBITDA for the next 12 months—and 24x its projected adjusted EBITDA for fiscal year 2027. This valuation significantly surpasses typical multiples seen in traditional industrial M&A. Clearly, this elevated valuation directly reflects the extraordinary fervor surrounding the AI infrastructure sector: as global tech giants race to build data centers in pursuit of computing power, thermal management technology has become a critical physical bottleneck constraining AI development. Per Ecolab’s disclosures, CoolIT is projected to generate approximately USD 550 million in sales over the next 12 months, with an adjusted EBITDA margin of around 30%. This implies Ecolab paid over 8.6x revenue for a company generating roughly USD 550 million annually. For comparison, Ecolab’s own market capitalization stands at approximately USD 77.7 billion, with projected 2025 revenue of USD 16.08 billion—yielding a price-to-sales ratio of only ~4.8x. Upon closing, Ecolab’s addressable market (TAM) will double—from USD 5 billion to USD 10 billion—with the market expanding at double-digit annual growth rates. Ecolab expects the acquisition to lift organic sales growth for its global water business by two percentage points in the first year post-closing, and boost overall organic sales growth by one percentage point. Starting in 2028 (excluding non-cash amortization expenses), the deal is expected to accrete to adjusted earnings per share. To finance the acquisition, Ecolab will raise new debt specifically for this transaction. From gaming enthusiast to liquid-cooling leader Public records show CoolIT Systems was founded in 2001 and is headquartered in Calgary, Canada. Founders Brydon Gierl, Sandy Scott, and Jason Myers conceived the idea of revolutionizing computer cooling amid Calgary’s vibrant startup ecosystem. According to company history, Sandy—a passionate gamer—was frustrated by overheating graphics cards that severely degraded his PC gaming experience. He approached Brydon for help, and the two began early experiments on a kitchen table to solve this pain point for high-performance computing users. This 'basement R&D' phase lasted approximately three years.