Net profit of 30 billion RMB in three years—KKR is exiting again

Originally published by 'China Private Equity Investment' (ID: PE-China) Author: Wei Yajun Photography: Bob KKR (including co-investors) achieved a three-year gross return exceeding 17x. A flawless 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 (together with co-investors) acquired a majority stake in CoolIT Systems for approximately USD 270 million. The transaction is expected to close in Q3 2026. An expensive acquisition Valuation far exceeds traditional industrial sectors According to the transaction terms, this acquisition’s valuation is notably 'expensive.' Reportedly, the USD 4.75 billion price tag equates to roughly 29x CoolIT’s projected adjusted EBITDA for the next 12 months—and 24x its projected adjusted EBITDA for fiscal year 2027. This valuation level significantly surpasses typical M&A multiples seen in traditional industrial sectors. Clearly, the elevated valuation directly reflects the extraordinary fervor surrounding the AI infrastructure sector: as global tech giants race to build data centers amid intensifying competition for computing power, thermal management technology has become a critical physical bottleneck constraining AI advancement. Per Ecolab’s disclosures, CoolIT is expected 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 more than 8.6x CoolIT’s annual sales revenue. For comparison, Ecolab’s current 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 completion, Ecolab’s total addressable market (TAM) for water-related solutions will double—from USD 5 billion to USD 10 billion—with that market growing at double-digit annual rates. Ecolab expects the acquisition to lift organic sales growth for its global water business by 2 percentage points in the first year post-close, and overall organic sales growth by 1 percentage point. Starting in 2028 (excluding non-cash amortization expenses), the deal is projected to accrete to adjusted earnings per share. To finance the acquisition, Ecolab will raise new transaction debt. From gaming enthusiast to liquid-cooling leader Public records indicate CoolIT Systems was founded in 2001 and is headquartered in Calgary, Canada. Its three 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 was an avid gamer—but his PC’s overheating graphics card severely hampered his gaming experience. He approached Brydon for help, and the two began early experiments on a kitchen table to solve this pain point affecting high-performance computing users.

Q2 2023 financial results summary for 49 chemical companies including BASF, Linde, Dow, Rongsheng Petrochemical, Mitsubishi Chemical, and PPG

Group sales grew organically by 4.9%, reaching approximately €10.9 billion; nominal growth stood at 0.1%, with both business segments delivering exceptionally strong performance. Operating profit (EBIT) rose to €1.254 billion, up 7.6% year-on-year. Q2 sales totaled €5.316 billion, down 5.8% year-on-year. H1 Adhesives Technologies segment sales grew nominally by 0.1% to €5.475 billion; Q2 sales amounted to €2.683 billion (~USD 2.91 billion), down 5.4% year-on-year. H1 Consumer Brands segment sales reached €5.365 billion, up 0.6% nominally; Q2 sales were €2.594 billion, down 5.7% year-on-year. Arkema Group announced its Q2 2023 financial results. Q2 sales totaled €2.442 billion (~USD 2.65 billion), down 23.3% year-on-year from €3.184 billion. Q2 EBITDA stood at €417 million, down 40.9% year-on-year from €705 million. Q2 adjusted net income was €207 million, down 53.3% year-on-year from €443 million. Specialty chemicals company LANXESS announced its Q2 2023 financial results. Owing to weak global demand across numerous customer industries, Q2 sales declined 11.1% year-on-year—to €1.778 billion (~USD 1.93 billion) from €1.999 billion. EBITDA from continuing operations fell 57.7% year-on-year—to €107 million from €253 million. Net income from continuing operations dropped from €48 million to a net loss of €145 million. Sales by business unit: Consumer Protection €604 million; Specialty Additives €620 million; High-Performance Intermediates €484 million. U.S.-based chemical company Dow Inc. announced its Q2 2023 financial results. Q2 net sales totaled USD 11.42 billion, down from USD 15.664 billion year-on-year. Q2 net income attributable to common shareholders was USD 485 million, down from USD 1.661 billion year-on-year. Ecolab announced its Q2 2023 financial results. Q2 net sales totaled USD 3.852 billion, up from USD 3.581 billion year-on-year. Q2 net income attributable to the company was USD 330 million, up from USD 308 million year-on-year. Westlake Corporation announced its Q2 2023 financial results. Q2 net sales totaled USD 3.251 billion, down from USD 3.356 billion year-on-year. Q2 net income attributable to the company was USD 297 million, down from USD 394 million year-on-year. DuPont announced its Q2 2023 financial results. Q2 net sales totaled USD 3.094 billion, down from USD 3.322 billion year-on-year. Q2 net loss attributable to shareholders was USD 131 million, compared to net income of USD 787 million year-on-year.

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