Company: LGN
Filing Date: 2025-09-02
Form Type: S-1/A
Source: 0001193125-25-193346
Chunk: 111

Company: Legence Corp.
Filing Date: 2025-09-02
Form: S-1/A
Chunk 111
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 valuation allowance;                                                                                                        |

| (2) | We will record a $97.7 million liability under the tax receivable agreement (or $106.1 million if the                                                                                                                                                
 underwriters exercise in full their option to purchase additional shares of Class A Common Stock and after giving effect to the application of the net proceeds therefrom) based on our estimate of the aggregate amount that we will pay to certain 
 of the Existing Owners under the tax receivable agreement as a result of the Offering Transactions; and                                                                                                                                              |

| (3) | We will record an adjustment to decrease additional paid-in capital of                                                                                                                                                       
 $70.6 million, the difference between the increase in deferred tax assets and the increase in liabilities due to certain of the Existing Owners under the tax receivable agreement as a result of the Offering Transactions. |

Due to the uncertainty as to the amount and timing of future exchanges of LGN Units by the LGN Unit Holders and as to the price per share of our Class A Common Stock at the time of any such exchanges, the unaudited pro forma condensed consolidated financial information does not assume that exchanges of LGN Units have occurred. Therefore, no increases in tax basis in Legence’s assets or other tax benefits that may be realized as a result of any such future exchanges have been reflected in the unaudited pro forma condensed consolidated financial information. However, if all of the LGN Unit Holders were to 76

exchange their LGN Units for shares of Class A Common Stock and all vested Series A Profits Interests were converted to LGN Units and subsequently exchanged for shares of Class A Common Stock (at the assumed initial public offering price of $27.00 per share of Class A Common Stock, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, after deducting assumed underwriting discounts and commissions and estimated offering expenses) immediately following the completion of this offering, we would recognize an incremental deferred tax asset of approximately $249.8 million and a non-currentliability of approximately $276.7 million based on the Company’s estimate of the aggregate amount that it will pay under the tax receivable agreement as a result of such future exchanges, utilizing various assumptions set forth in the Tax Receivable Agreement, including without limitation the following: (i) a price of $27.00 per share (the assumed initial public offering price, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus); (ii) a