A Member of Pat McKeough’s Inner Circle recently asked for his advice on Ecolab, a global leader in water, hygiene, cleaning, and infection-prevention solutions for industrial, institutional, healthcare, and life sciences customers.
Pat likes the company’s durable competitive moat built on chemistry IP, embedded service relationships, and switching‑cost‑laden systems (dispensers, dosing equipment, and digital monitoring) that customers integrate into daily operations. There’s also a growing need for safe water, food safety, infection prevention, and more efficient industrial processes. However, Pat notes the shares are expensive at the current price.
ECOLAB INC. (Symbol ECL on New York) develops and markets chemicals and services for cleaning, pest elimination, sanitizing, and maintenance. It sells to customers in the food service, food and beverage processing, healthcare, government, education, and retail segments.
The company sells its products through four main divisions: Global Water (50% of revenue) serves customers in the water, food & beverage, paper, and textile-care fields; Global Institutional & Specialty (37%) sells its products to restaurants, hotels, schools and hospitals; Global Pest Elimination (8%) helps detect and eliminate pests; and Global Life Sciences (5%) makes pharmaceutical, personal care, infection and containment control solutions.
In December 2025, Ecolab completed its acquisition of the electronics business of Montreal-based Ovivo Inc., a global provider of water and wastewater treatment equipment and technology, for $1.8 billion in cash.
Ovivo’s electronics business provides ultra-pure water technologies for semiconductor manufacturing. In 2025, it generated over $500 million in sales. The firm has approximately 900 employees.
On March 20, 2026, Ecolab announced its acquisition of CoolIT Systems, a provider of liquid-cooling technology for next-generation datacentres. Ecolab is paying $4.75 billion for the Calgary-based company.
Ecolab is buying CoolIT from alternative asset manager KKR & Co. (symbol KKR on New York) and Mubadala Investment Co., the Abu Dhabi sovereign wealth fund. The acquisition is one of the largest Canadian tech transactions in the last 20 years.
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With a 25-year history in liquid cooling, CoolIT designs and manufactures advanced systems that enable sustainable datacentre growth as demand for AI-driven computing power rises. While cooling can account for up to 50% of total facility energy use in traditional air-cooled datacentres, liquid-cooled datacentres use approximately 30% to 40% less energy for cooling while also reducing water consumption as a closed-loop system. Today, hyperscalers and datacentre operators use CoolIT’s liquid cooling technologies with the aim of improving energy efficiency and supporting higher-density AI infrastructure.
The combination of CoolIT’s liquid-cooling technology with Ecolab’s Global Water business should accelerate Ecolab’s growth; it strengthens the company’s ability to provide a CaaS (cooling-as-a-service) offering for its customers.
Revenue rises in all four of Ecolab’s segments
In the three months ended March 31, 2026, Ecolab’s revenue increased by 10.0%, to $4.07 billion from $3.70 billion a year earlier. Revenue increased across all four segments.
Revenue rose due to double-digit growth in Global High-Tech and digital, strong performance in Life Sciences where bioprocessing sales more than doubled, and continued growth in Pest Elimination, Institutional, and Specialty segments, driven by strong pricing and accelerated volume growth.
Excluding one-time items, earnings rose 13.0%, to $482.5 million, or $1.70 a share, from $427.1 million, or $1.50.
Ecolab’s long-term outlook is positive. However, the stock trades at a high 30.7 times the forecast 2026 earnings of $8.53 a share. That adds risk.
Recommendation in Pat’s Inner Circle: Ecolab Inc. is okay to hold.
