Company: LGN
Filing Date: 2025-08-15
Form Type: S-1
Source: 0001193125-25-181698
Chunk: 86

Company: Legence Corp.
Filing Date: 2025-08-15
Form: S-1
Chunk 86
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 cause Legence Holdings to be treated as a publicly traded partnership. Applicable U.S. Treasury regulations provide for certain safe harbors from treatment as a
publicly traded partnership, and we intend to operate such that exchanges or other transfers of LGN Units qualify for one or more such safe harbors.

If Legence Holdings were to become a publicly traded partnership, significant tax inefficiencies might result for us and for Legence Holdings,
including as a result of our inability to file a consolidated U.S. federal income tax return with Legence Holdings. In addition, we would no longer have the benefit of certain increases in tax basis covered under the Tax Receivable Agreement, and we
would not be able to recover any payments made by us under the Tax Receivable Agreement, even if the corresponding tax benefits (including any claimed increase in the tax basis of Legence Holdings’ assets) were subsequently determined to be
unavailable.

In certain circumstances, Legence Holdings will be required to make tax distributions to us and the Pubco Subsidiaries, and the LGN Unit Holders, and the tax distributions that Legence Holdings will be required to make may be substantial.

Legence Holdings will
be treated as a partnership for U.S. federal tax purposes and, as such, is not subject to U.S. federal income tax. Instead, taxable income will be allocated to the LGN Unit Holders and us (including through the Pubco Subsidiaries). Pursuant to the
Legence Holdings LLC Agreement, Legence Holdings will generally make pro rata cash distributions, or tax distributions, to the LGN Unit Holders and us and the Pubco Subsidiaries, in an amount at least sufficient to allow us to pay our taxes and meet
our payment obligations under the Tax Receivable Agreement.

Funds used by Legence Holdings to satisfy its tax distribution obligations
will not be available for reinvestment in our business. Moreover, the tax distributions that Legence Holdings will be required to make may be substantial and may exceed (as a percentage of Legence Holdings’ income) the overall effective tax
rate applicable to a similarly situated corporate taxpayer.

Risks Related to This Offering

If the underwriters exercise their option to purchase additional shares of Class A Common Stock from us, the proceeds will be used to purchase or redeem outstanding equity interests from our Existing Owners and will not be available to fund our operations.

We and the selling
stockholder have granted the underwriters an option to purchase up to additional shares of Class A