TL;DR · 30-second read
The Short Version
The computers behind artificial intelligence now run so hot that fans and air conditioning can’t keep up. Data centers, the warehouses full of computers that run the internet, are switching to liquid cooling, which pipes coolant right up to the chips.
Two companies, 3C and London-based Datalec, have merged to sell that whole job as one package: design it, build it, keep it running. Together they expect more than $400 million in sales this year.
The telling part is their first big move. They plan to hire 200 engineers, because people who can install this kind of plumbing are hard to find.
3C, a liquid-cooling-focused data center services company founded by former CoolIT Systems CEO Steve Walton, has merged with Datalec Precision Installations, a London data center engineering firm founded in 2012, according to an announcement the companies issued through PR Newswire on October 14, 2026. The combined company, 3C Datalec, has about 1,000 employees and forecasts more than US$400 million in 2026 revenue. It works with four of the five largest hyperscalers, which are the giant cloud operators, and more than 25 colocation providers. It has active projects in 16 countries totaling hundreds of megawatts.
New investment comes from Longbow Capital, S2G Investments, Apogem Capital and QIC. The company plans to hire 200 engineers over the next 12 months and open facilities in Warsaw, Calgary and Austin. Financial terms were not disclosed.
Executive Summary
The merger pairs a company built around liquid cooling expertise with an established contractor that does mechanical and electrical (M&E) engineering, installation, manufacturing and facilities management. The combined firm groups its work into three stages: Create (design), Construct (cooling, M&E, manufacturing and connectivity installation) and Care (commissioning, operations and maintenance). The pitch is that an AI data center operator can hire one firm to handle cooling from the drawing board through years of operation.
The deal matters because of where it puts the difficulty. Walton’s own framing is that liquid cooling is no longer the open question. “The hard part now,” he said, is “making cooling, power, construction and operations work as one system, while running at scale.” The company’s stated growth plan follows from that view. It is spending on engineers, training and field facilities rather than announcing a new cooling product.
Why Liquid Cooling Turns Into an Installation Problem
Air cooling is largely a matter of buying equipment. Operators install air handlers, manage airflow and replace units on a schedule. Liquid cooling is different because it extends a building’s water systems all the way to the server rack. That requires coolant distribution units, which are pumps and heat exchangers that separate the building water loop from the loop that touches the chips. It also requires pipework and manifolds running through the data hall, leak detection, and controls tied into the electrical and building management systems. Each of those elements meets a different trade: plumbing, electrical work, structural work, commissioning. Every handoff between a cooling vendor, a general contractor and the operator is a point where schedules slip and responsibility blurs.
3C Datalec is built around that seam. 3C brings the cooling specialism; Walton says the CoolIT team he led “became a global leader in liquid cooling.” Datalec brings more than a decade of M&E delivery and facilities management on what its co-founder Stuart Richmond calls customers’ “most critical sites.” Neither half on its own covers the full sequence from design to maintenance. The merger exists to close that gap.
The spending plan reinforces the reading. The company says the industry “is running short of skilled data centre engineers” and that it is responding by training its own staff through an internal university and apprenticeships. It plans to add 200 engineers within a year, roughly a 20% increase on its 1,000-person workforce. It is also giving staff equity through its Leadership & Employee Equity Program. If cooling were mainly a hardware constraint, the money would go to factories and product development. In this deal, a large share is going to people who install and run the systems, which identifies skilled labor as the binding constraint.
Retrofits Raise the Stakes
S2G’s Bala Nagarajan pointed to a second source of demand: upgrading existing facilities for higher-density workloads, not just building new ones. Retrofits are where integration difficulty peaks. Installing liquid cooling in a live data hall means working around running equipment, existing power distribution and floor layouts designed for airflow. That work depends on knowing the specific building, which favors contractors with long-standing site relationships, and that describes Datalec’s existing business.
For operators, this is the practical case for a single partner. One firm accountable for design, installation and maintenance can reduce coordination risk on a complex upgrade. The trade-off is dependence. An operator that hands one vendor the full lifecycle of its cooling plant has less leverage on price and fewer easy exits if performance disappoints.
What the Scale Claims Support
The customer claims are substantial on their face. Four of the five largest hyperscalers, more than 25 colocation providers, and active projects in 16 countries indicate that the combined firm already sits inside major buyers’ supply chains. Revenue of more than US$400 million across about 1,000 staff works out to roughly US$400,000 per employee, which fits a business whose output is largely engineering labor deployed on sites.
The headline figures also leave a lot open. “Hundreds of megawatts” is a wide range. Working with a hyperscaler can mean a single maintenance contract or a multi-site program. The US$400 million is a forecast for the current year, not reported results, and the announcement does not split it between liquid cooling and conventional M&E work. The share of revenue that actually comes from liquid cooling is the number that would show whether this is a cooling company or a strong contractor with a cooling division.
The Capital Behind the Build-Out
The investor group combines energy and industrial specialists with large-scale private capital. Longbow Capital is a Canadian manager focused on energy, power, industrials and technology. S2G invests across food and agriculture, energy and oceans. Apogem, a New York Life subsidiary with about US$44 billion under management, spans private credit and private equity. QIC is also a backer. Because the group includes lenders as well as equity investors, the new investment could be equity, debt or a mix.
The new locations (Warsaw, Calgary and Austin) extend the firm’s physical presence into Central Europe and two North American markets. For a services business, local presence is a requirement, since installation and maintenance crews have to be near the sites they serve. The expansion is consistent with the view that winning in AI cooling depends on having trained people close to where data centers are being built and upgraded.
Background
Data centers have traditionally been cooled with air, using fans and air handlers to move heat away from servers. AI hardware has changed that. Chips used for training and running AI models draw much more power per rack, and air can no longer remove the resulting heat efficiently. Liquid cooling, which brings coolant directly to the hardware, has moved from a niche used in supercomputing to a mainstream requirement for AI facilities. Installing it involves the mechanical, electrical and building systems of the whole data hall, not just the servers.
Datalec Precision Installations was founded in London in 2012 and built its business on data center engineering, installation and facilities management. 3C was founded by Steve Walton after his tenure as CEO of CoolIT Systems, a liquid cooling company. The merged 3C Datalec sits at the intersection of cooling technology and the contracting work needed to deploy it. Source: 3C Merges with Datalec to Create US$400M+ Revenue Liquid Cooling and Data Centre Services Platform, the companies’ October 14, 2026 announcement of the merger, new investors and expansion plans.Sources