Company: LGN
Filing Date: 2025-08-15
Form Type: S-1
Source: 0001193125-25-181698
Chunk: 304

Company: Legence Corp.
Filing Date: 2025-08-15
Form: S-1
Chunk 304
---
 probability weighted discounted cash flow method is used to convert the projected earnings to a F-46

Legence Holdings LLC and Subsidiaries Notes to Consolidated Financial Statements present fair value, including inputs such as projected earnings from the acquired business, the likelihood of such outcomes, and specific contractual terms governing the individual earnout. During the years ended December 31, 2024 and 2023, there were no significant changes in the valuation techniques or inputs related to the Company’s contingent consideration liabilities. As of December 31, 2023, all the earnout periods were complete and the calculation of the earnout obligation was final. The remaining amount to be paid for contingent consideration liabilities as of December 31, 2023 was $65.7 million, which is included in Accrued and other current liabilities on the Consolidated Balance Sheets. Changes in the fair value of contingent consideration liabilities are recorded to Changes in the fair value of contingent consideration liabilities on the Company’s Consolidated Statements of Operations. The following is a Level 3 summary of changes in contingent consideration liabilities (in thousands):

|                                                      |     |   |    2024 |   |     |   |    2023 |   |
|:-----------------------------------------------------|:----|:--|--------:|:--|:----|:--|--------:|:--|
| Balance, beginning of period                         |     | $ |  65,700 |   |     | $ |  41,425 |   |
| Initial fair value for current year acquisitions     |     |   |       — |   |     |   |  13,929 |   |
| Change in fair value included in earnings            |     |   |       — |   |     |   |  31,071 |   |
| Payment of contingent consideration—cash             |     |   | (65,700 | ) |     |   | (11,400 | ) |
| Payment of contingent consideration—Parent interests |     |   |       — |   |     |   |  (9,325 | ) |
| Balance, end of period                               |     | $ |       — |   |     | $ |  65,700 |   |

During the year ended December 31, 2024, all contingent consideration liabilities were paid in cash, primarily relating to Black Bear, A.O. Reed, and OCI; $33.2 million of these payments were made to related parties. The following amounts