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ECL: CoolIT Closes; Liquid Cooling Story Emerges

Published on July 6, 2026

Dauvin Peterson

On July 2nd, ECL announced the closing of the CoolIT acquisition (~$4.75B) — in early Q3, which we anticipated given the May 15th Canadian Competition Bureau ARC issuance and ECL’s completion of $5B in deal financing on May 19th — as well as providing updated guidance and projections for the combined businesses. Closing this acquisition has given management the opportunity to update 2026 guidance to account for the acquisition but more importantly, set multi-year targets for EPS and margin growth led by the growing global high tech (GHT) business lines. Liquid cooling, CoolIT’s core business, is an exciting and durable growth area tied to the AI build out and puts ECL in the conversation with differentiated value add.

Digesting the acquisition and adjustments to 2026 EPS guidance will need to occur; however, we think 2027+ company targets look strong. Consensus had moved to $8.31 for 2026 EPS, below the prior guidance of $8.43–$8.63 (which excluded the CoolIT acquisition impact). Updated guide is $8.03–$8.23 which includes $0.40/share of impact from non-cash amortization and financing costs from the deal.

Long term targets tell the story that made us excited about this name within the liquid cooling and semiconductor cycle. The current GHT business lines (CoolIT and Ovivo water primarily) are expected to grow from $1.5B of annualized revenue today to $4B by 2030 (a 25+% annual growth rate). CoolIT’s year-to-date sales grew more than 100% ahead of close, providing early evidence of the growth trajectory. Secondly, ECL operating income margins are expected to expand by 100–150bp annually through 2030. This appears to be a combination of the accretive GHT lines combined with their efforts across other legacy businesses.

From an industry perspective, NVIDIA commentary included in the closing announcement (link) was directionally positive and consistent with our prior research — confirming that the combined Ecolab and CoolIT platform is at the leading edge of liquid cooling for next-generation AI compute.

A few points around the stock and valuation considerations – most of the coverage value the stock on a P/E target and historically the stock has seen 70–80% premiums to the S&P P/E multiple. The longevity of the growth and margin expansion laid out last week would appear to warrant strong premium multiples as we see execution on the technology integration strategy, led by our excitement around liquid cooling.

ECL shares are up over 10% since we highlighted the name as a potential beneficiary of AI capex and liquid cooling trends in mid-May (link below). Admittedly, absent the closing of the acquisition, the recent performance has been a combination of raw material relief due to the decline in oil prices from the Iran conflict resolution as well as uncorrelated performance to the recent unwind in AI related capex names. From our conversations with clients, ECL was not a core holding in this theme and could have been acting as a relative hedge. The next phase of performance will come from the GHT drivers and new company multi-year targets.

We believe ECL’s GHT strategy and exposure to a durable AI capex cycle both in data center and semiconductor fabrication support the company’s guide for durable earnings growth through the end of the decade. Next steps that we believe to be important will be executing on the integration of CoolIT’s liquid cooling portfolio with ECL’s technology and showing a continuing order ramp. We would also welcome further breakout of GHT’s growth area within semiconductor fabrication as that is an additional tailwind. Looking to 2027 and 2028 earnings, we see the setup as increasingly compelling. As the near-term amortization and financing drag from recent acquisitions progressively rolls off in 2026, the full earnings power of Ecolab’s technology transformation should come into clearer view.

Recent notes on ECL below for reference.

ECL: CoolIT Demonstrates 15kW Coldplate — Jun 2, 2026

ECL: Liquid Cooling Update & IR Takeaways — Catalysts Bringing AI Capex Exposure Into Focus — May 22, 2026

The Next AI Backlog Story – Liquid Cooling — May 6, 2026

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