Abu Dhabi's Mubadala and KKR acquire Canada's CoolIT Systems

First announced in May, the deal is part of the sovereign fund's impact investing commitment

CoolIT System specialises in liquid cooling solutions for a demanding computing environment. Photo: Mubadala

Mubadala Investment Company and funds managed by private equity firm KKR have jointly acquired Canada-based CoolIT Systems as Abu Dhabi's sovereign wealth fund continues to expand its technology investment portfolio.

The acquisition, first announced in May, is part of Mubadala’s impact investing commitment, the sovereign fund said on Wednesday.

Based in Calgary, CoolIT specialises in scalable liquid cooling solutions for the demanding computing environment. It has operations across North America, China and Taiwan.

The company's technology helps to reduce operating costs and the carbon emissions of data centres and digital infrastructure, leading to a server density that is higher than that of legacy air-cooling methods.

“With the data centre industry expected to consume 8 per cent of the world’s energy by 2030, liquid cooling plays a vital role in reducing the digital economy’s emissions footprint,” said Abdulla Shadid, head of the Impact Investing team at Mubadala, said on Wednesday.

The investment will help CoolIT to “scale its best-in-class cooling solutions and better service its global customer base, while delivering a positive climate impact”, he said.

Mubadala’s Impact Investing team invests in businesses providing solutions to critical environmental or social challenges, while generating financial returns.

The fund’s impact investing strategy aligns with the objectives set out in the UN's Sustainable Development Goals.

KKR invested in CoolIT as part of its Global Impact strategy, which is focused on identifying and investing in opportunities where “financial performance and societal impact are intrinsically aligned”, Mubadala said.

Mubadala, which invests on behalf of the Abu Dhabi government, is at the heart of the emirate’s efforts to diversify its revenue base and generate income from sources other than oil.

Its investment portfolio spans six continents, with interests in several sectors and asset classes, including aerospace, information and communications technology, semiconductors, metals and mining, oil and gas, renewable energy and petrochemicals.

The sovereign fund, which manages more than $276 billion in assets globally, last year joined hands with KKR to invest across performing private credit opportunities in the Asia-Pacific region.

As part of the “strategic partnership”, Mubadala and KKR will invest at least $1 billion in long-term capital, providing credit solutions to companies and sponsors, the two companies said in October last year.

Mubadala will also use its capital alongside KKR’s existing pools of funds, including the $1.1 billion KKR Asia Credit Opportunities Fund, which focuses on viable privately originated credit investments in the region, the companies said at the time.