Special Feature 6 | The Thermal Management Supply Chain: Four Billion-Dollar Acquisitions in One Year—What Are the Giants Buying?

Expanding the thermal management chain outward from the chip reveals six layers—each with its own distinct economic characteristics. Layer 1: Cold Plates—the metal plate directly attached to the chip. This component carries liquid through microchannels to extract heat directly from GPUs. Market leaders include CoolIT’s OMNI microchannel cold plates and Boyd, alongside Asetek. Note a telling signal: both of these top-tier players have already been acquired—CoolIT by Ecolab, Boyd by Eaton. Independent pure-play vendors are vanishing; remaining independent players are growing increasingly scarce. Layer 2: CDUs (Coolant Distribution Units)—the value concentration point, and where intensifying competition begins. The CDU serves as the heart of a liquid-cooling system: regulating coolant temperature, flow rate, and pressure. Nearly every liquid-cooling deployment requires one. It represents the largest component market—projected at ~$2.38 billion in 2025, accounting for 35% of the entire liquid-cooling market. Key players: Vertiv’s Liebert XDU series leads (holding ~11.3% share of the overall liquid-cooling market); Schneider entered via acquisition of Motivair and now holds market share nearly on par with Vertiv; CoolIT’s CHx units scale up to 1,500 kW per unit. Yet a reality check is warranted: Dell’Oro has publicly questioned whether the CDU segment is already saturating. New entrants continue flooding in, but industry consensus forecasts consolidation within the next decade—and inevitable exits. CDUs are shifting from scarcity toward cutthroat competition; going forward, market share will concentrate among players tightly integrated with hyperscalers—Aaon’s rapid share gains, achieved through deep partnerships with hyperscale customers, exemplify this dynamic. Layer 3: Coolants & Water Chemistry—the layer thoroughly covered in Section 2, serving as Ecolab’s consumables-based entry point. Here we add just one judgment: this is the most economically attractive layer across the entire thermal management chain—and also the most widely overlooked by the market. Layer 4: Quick-Connect Fittings & Tubing—the smallest components, yet the source of the industry’s greatest fear. Introducing liquid into server racks remains the sector’s biggest nightmare: a single drop of coolant onto a $1M compute tray constitutes a major incident. Hence, dry-break quick-connect fittings (which automatically seal upon disconnection) and manifolds—this layer commands premium pricing based entirely on reliability. nVent partnered directly with NVIDIA and expanded its production capacity by 117,000 sq. ft. specifically for this purpose; full-stack providers like DCX bundle quick-connects, tubing, and engineered fluid systems into turnkey deliveries. The logic mirrors that of power whips in the power distribution chain: as rack density increases, so do the volume and specification requirements for tubing and connectors—and any major industry-wide leakage incident would only further elevate the reliability premium for this layer. Layer 5: Facility-Side Thermal Management—the overlooked ‘traditional HVAC renaissance’ layer. Ultimately, heat must be expelled from the building: via cooling towers, dry coolers, and chillers. This layer hosts companies long valued as ‘traditional industrial stocks,’ now undergoing AI-driven re-rating: Modine’s data center business grew 42% quarter-on-quarter, targeting >$2B in data center revenue by FY2028; Aaon is capturing share at high speed; Johnson Controls ranks second in certain benchmarks thanks to its Silent-Aire platform; Trane acquired LiquidStack to fill its immersion-cooling gap.

Profit of RMB 30 Billion 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 paper return exceeding 17x. A textbook-perfect exit. Recently, Ecolab Inc.—a global leader in water treatment and sustainable solutions—announced its definitive agreement to 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 controlling stake in CoolIT Systems for approximately USD 270 million. The transaction is expected to close in Q3 2026. An Expensive Acquisition Valuation Far Exceeding Traditional Industrial Benchmarks From a deal-terms perspective, this acquisition’s valuation is exceptionally high. According to available information, 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. Such multiples vastly exceed typical valuations seen in traditional industrial M&A. Clearly, this elevated valuation directly reflects the extraordinary fervor gripping the AI infrastructure sector: as global tech giants race to build data centers in pursuit of computing power, thermal management technology has become the 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 ~30%. That means Ecolab paid over 8.6x revenue for a company generating roughly USD 550 million annually. For comparison, Ecolab’s own market capitalization stands at ~USD 77.7 billion, with projected 2025 revenue of ~USD 16.08 billion—implying a price-to-sales ratio of only ~4.8x. Post-acquisition, Ecolab’s addressable market (TAM) will double—from USD 5 billion to USD 10 billion—with this market expanding at double-digit annual growth rates. Ecolab expects the acquisition to lift organic sales growth for its Global Water business by 2 percentage points in Year 1, and boost consolidated organic sales growth by 1 percentage point. Starting in 2028 (excluding non-cash amortization), 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 Dominator Public records show CoolIT Systems was founded in 2001, 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 GPU overheating severely degrading his PC gaming experience. He approached Brydon for help, and the two began early experiments on his kitchen table to solve this pain point plaguing high-performance computing users.

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