LGN · Legence Corp. Class A Common stock

Legence Corp. operates as a leading national provider of integrated MEP engineering, consulting, installation, and maintenance services, capitalizing on megatrends like data center expansion (projected $70B facilities investment by 2029 per Dodge), manufacturing reshoring, and energy efficiency demands amid 23% electricity price hikes since 2020. With $2.55B revenue in 2025 (27% CAGR 2022-2025, 15% pro forma), 11.7% Adjusted EBITDA margins, and $3.7B backlog (+49% YoY), the company demonstrates robust execution across high-growth sectors where it derives >50% revenue. Its Up-C structure preserves tax efficiency for Blackstone (61% pre-offering voting control via Aggregators), enabling LGN Unit exchanges for Class A shares while entitling TRA Members to 85% of tax savings ($207M recorded liability, potential $545M change-of-control payment).

This S-1 registers a $741M secondary offering of 11M Class A shares by Blackstone-controlled selling stockholders (Legence Parent ML/II ML) at $58.57/share, with no proceeds to Legence but potential margin loan repayments for sellers. Post-offering, Blackstone retains ~51% voting power; 90-day lock-ups apply to insiders. Pro forma for recent Bowers acquisition ($767M FY2025 revenue, $200M incremental debt), combined 2025 revenue reaches $3.45B. Financially, $829M debt supports growth but exposes to interest rate risk (SOFR+2.25% on new tranche); strong cash conversion ($257M operating cash flow 2025) mitigates near-term concerns.

Competitive moats include 1,200 engineers, 7,000 technicians, in-house fabrication (6 facilities), and 23-year average top-10 client tenure, yielding 80% jobs meeting margin targets. National presence in data center hubs (52% planned capacity) and small-job focus (60% <$10M contracts) diversify risk. Growth strategy targets wallet-share expansion, maintenance recurring revenue (13%, 23% CAGR), and bolt-on M&A (24 since 2020).

Key risks center on Blackstone dominance (board nomination rights >5% ownership), execution in cyclical construction (labor shortages, cost overruns), $207M TRA liability, and debt covenants. Management's 25+ years average experience and union partnerships (90% workforce) bolster operations, but sustained 15% growth hinges on high-growth sector momentum and acquisition integration.