Company: LGN
Filing Date: 2025-02-14
Form Type: DRS
Source: 0000950123-25-002471
Chunk: 191

Company: Legence Corp.
Filing Date: 2025-02-14
Form: DRS
Chunk 191
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 interest in Legence Holdings
through Legence Investment Aggregator I and any future taxable redemptions or exchanges by the LGN Unit Holders of LGN Units for shares of our Class A Common Stock are expected to result in tax basis adjustments with respect to the assets of
Legence Holdings that will be allocated to us and thus produce favorable tax attributes for us. These tax attributes are expected to reduce the amount of tax that we would otherwise be required to pay in the future. While the Tax Receivable
Agreement will require us to pay the TRA Members 85% of the amount of cash savings, if any, in our U.S. federal, state and local income tax or franchise tax that we actually realize from the utilization of such tax attributes, we will be able to
retain the benefit of the remaining 15% of these tax savings.

Holding Company Structure

Our post-offering organizational structure will allow the LGN Unit Holders to retain their equity ownership in Legence Holdings, a partnership
for U.S. federal income tax purposes and, as such, generally will not be subject to any entity-level U.S. federal income tax. Instead, any taxable income of Legence Holdings will be allocated to holders of LGN Units, including us. Investors in this
offering will, by contrast, hold their equity ownership in the form of shares of Class A Common Stock in us, a corporation for U.S. federal income tax purposes. The LGN Unit Holders will generally incur U.S. federal, state and local income
taxes on their proportionate share of any taxable income of Legence Holdings.

In addition, pursuant to our amended and restated
certificate of incorporation and the Legence Holdings LLC Agreement, our capital structure and the capital structure of Legence Holdings will generally replicate one another and will provide for customary antidilution mechanisms in order to maintain
the one-for-one exchange ratio between the LGN Units (and a corresponding number of shares of Class B Common Stock) and our Class A Common Stock, among other
things.

We and the LGN Unit Holders will generally incur U.S. federal, state and local income taxes on our proportionate share of any
taxable income of Legence Holdings and will be allocated our proportionate share of any taxable loss of Legence Holdings. The Legence Holdings LLC Agreement will provide, to the extent cash is available, for distributions pro rata to us and the LGN
Unit Holders in an amount at least sufficient to allow us